Case Note & Summary
The petitioner, a developer, submitted a proposal for a Slum Rehabilitation Scheme which was in the nature of a Township Development Scheme for approximately 1.89 lakh sq. mtrs. of land, involving holistic development with extensive amenities and free-sale buildings. The Slum Rehabilitation Authority (SRA) issued a provisional Letter of Intent (LOI) on 7 December 2010 after the State Government approved the scheme under its directives dated 8 October 2010. The petitioner paid a substantial land premium and took steps towards implementation. Subsequently, the State Government cancelled the SRA Circular dated 12 November 2010 and the provisional LOI, alleging inconsistencies with the earlier directives. The petitioner challenged the cancellation, having previously obtained a court order setting aside an earlier cancellation for violation of natural justice. The High Court considered whether the SRA Circular and LOI were inconsistent with the government directives, and whether the State Government's order was valid. The Court found that the govvernment directives permitted sector-wise development and granted discretion to SRA, and the Circular merely implemented those directives without deviation. The scheme was a Township Development Scheme permitted under the New Housing Policy of 2007. The Court held that the State Government's supervisory power under Section 3K of the Maharashtra Slum Areas Act did not authorize arbitrary cancellation, especially when the developer had acted on the approvals and invested heavily. The impugned order dated 24 April 2012 was quashed, and the State Government was directed to reconsider the matter afresh after giving the petitioner a hearing.
Headnote
A) Slum Rehabilitation - Township Development Scheme - Permissibility - Maharashtra Slum Areas Act, 1971 - The scheme involving 1.89 lakh sq.mts., with infrastructure, amenities, and free-sale buildings, was a Township Development Scheme permitted under the New Housing Policy 2007 and Government Circular dated 2 July 2010. (Paras 3-4)
B) Administrative Law - Consistency of SRA Circular with Government Directives - Interpretation of Section 3K Directions - Maharashtra Slum Areas Act, 1971, Section 3K - The SRA Circular dated 12 November 2010 and the LOI were not inconsistent with the Government directives dated 8 October 2010; the directives did not prohibit sector-wise development and gave discretion to SRA. (Paras 2.2, 5)
C) Administrative Law - Violation of Natural Justice in Cancellation of LOI - Maharashtra Slum Areas Act, 1971 - The initial cancellation of LOI on 7 May 2011 was struck down for violating principles of natural justice; the subsequent order after show cause notice was also unsustainable as grounds of inconsistency were not established. (Paras 2.4-2.7)
D) Slum Rehabilitation - Scope of State Government's Supervisory Power under Section 3K - Maharashtra Slum Areas Act, 1971 - The State Government's power under Section 3K is supervisory, not appellate; the SRA's decisions as expert body should not be lightly interfered with unless there is material inconsistency or arbitrariness. (Paras 6)
Issue of Consideration
Whether the State Government's order cancelling the SRA Circular, LOI and prior approval was valid; whether the SRA Circular dated 12 November 2010 was inconsistent with Government directives dated 8 October 2010; and whether the State Government had the power under Section 3K of the Maharashtra Slum Areas Act to cancel the scheme in such circumstances.
Final Decision
The High Court allowed the petition, quashed the impugned order dated 24 April 2012, and directed the State Government to reconsider the matter afresh after hearing the petitioner.
Law Points
- Government directives under Section 3K of the Maharashtra Slum Areas Act allow sector-wise development
- SRA Circular was not inconsistent with government directives
- Slum Rehabilitation Scheme for township development is permitted under New Housing Policy 2007
- State Government must exercise supervisory power under Section 3K consistently
- SRA is the expert body for slum rehabilitation schemes
- Cancellation of LOI must follow principles of natural justice
Case Details
2013 LawText (BOM) (09) 54
WRIT PETITION NO. 1165 OF 2012
Mohit S. Shah, Chief Justice, and M.S. Sanklecha, J.
Mr. J.J. Bhat, Mr. N.G. Thakkar, Mr. Manish Parekh, Ms. Amita Jasani (for petitioner); Mr. Darius J. Khambata, Advocate General with Mr. Milind More, AGP, Mr. Afroz Shah (for State); Mr. V.D. Patil (for Slum Rehabilitation Authority); Mr. Sharmila Modle with Ms. Yamuna Parekh (for BMC); Mr. Pravin Samdani, Mr. Dipen Furia (for respondent Nos.7 & 8)
M/s. Sterling Buildcom Pvt.Ltd. and Shri Nilesh H. Modi
The State of Maharashtra, The Chief Minister, The Chief Executive Officer of Slum Rehabilitation Authority, Principal Secretary, Asst. Municipal Commissioner of Municipal Corporation for Greater Mumbai, The Deputy Collector of Chembur, Kashinath Patil Wadi & Mukti Nagar Cooperative Housing Society (proposed), Vithalrukmani Cooperative Housing Society (Proposed)
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Nature of Litigation
Writ petition under Article 226 of the Constitution challenging the State Government's order cancelling the Slum Rehabilitation Authority's circular and provisional Letter of Intent for a slum township development scheme.
Remedy Sought
The petitioner sought quashing of the order dated 24 April 2012 and restoration of the approvals, circular, and LOI.
Filing Reason
The State Government cancelled the SRA circular and LOI alleging they were inconsistent with earlier government directives, leading to the petition.
Previous Decisions
Earlier, SRA had cancelled the LOI on 7 May 2011; the High Court set aside that cancellation on 30 November 2011 and directed a fresh hearing after show cause notice.
Issues
Whether the State Government's order dated 24 April 2012 cancelling the SRA Circular and LOI was valid.
Whether the SRA Circular dated 12 November 2010 was inconsistent with the Government directives dated 8 October 2010.
Whether the State Government had the power under Section 3K to cancel the scheme in the given circumstances.
Submissions/Arguments
Petitioner argued that the SRA circular and LOI were consistent with government directives and the New Housing Policy 2007; the scheme was a township development with huge investments already made; there was no inconsistency.
The State argued that the circular deviated from the directives and the LOI was issued improperly.
Ratio Decidendi
Where the State Government issues directives under Section 3K of the Maharashtra Slum Areas Act, the SRA's circular implementing such directives is not inconsistent if it falls within the scope of those directives; the State Government's supervisory power does not extend to arbitrarily cancelling approved schemes, especially when the developer has acted on the LOI and invested substantial sums; principles of natural justice require a fair hearing before cancellation.
Judgment Excerpts
the petitioner challenges the order dated 24 April 2012 of the State Government, by which the Circular dated 12 November 2010 and the provisional Letter of Intent ... came to be cancelled.
The Circular issued by SRA on 12 November 2010 was on the basis of permission granted by the State Government in the Housing Department.
the Slum Rehabilitation Scheme, for which provisional LOI was issued by SRA in favour of the petitioner, was not such a scheme but it was a Township Development Scheme
Procedural History
Petitioner submitted proposal on 15-02-2010; SRA referred it to the State Government on 31-05-2010; State Government issued approval on 08-10-2010; SRA issued Circular on 12-11-2010; Petitioner paid scrutiny fees and land premium on 16-11-2010 and 25-11-2010; SRA issued provisional LOI on 07-12-2010; SRA cancelled LOI on 07-05-2011; High Court set aside cancellation on 30-11-2011 and directed fresh hearing; Show cause notice issued on 02-03-2012; Petitioner replied on 22-03-2012; Impugned order of State Government on 24-04-2012; Writ petition filed on 08-05-2012; Heard and judgment delivered on 24-09-2013.
Acts & Sections
- Constitution of India: Article 226
- Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971: Section 3K(1)
- Development Control Regulations for Greater Mumbai, 1991: Regulation 33(10)
