Bombay High Court Upholds Cancellation of NOC for Slum Rehabilitation Scheme Over Developer’s Non-Compliance

Writ Petition under Article 226 of Constitution of India challenging administrative order.

Petitioners sought quashing of order dated 10.1.2024 cancelling NOC and direction to sanction building proposal.

Cancellation of NOC dated 31.12.2021 prevented commencement of slum redevelopment construction

A. Order dated 8 November 2023 — WP (L) No. 26148 of 2023 The earlier writ petition concerned the proposed withdrawal/revocation of the developer's rights. BMC stated before the High Court that the earlier order dated 6 September 2023 would be withdrawn and that a fresh show-cause notice would be issued, followed by a hearing. The Court kept open the Petitioners' contention concerning the Municipal Commissioner's authority to issue such notice. B. Order dated 10 January 2024 After issuance of the show-cause notice and hearing, the Additional Municipal Commissioner: cancelled the NOC dated 31 December 2021; directed SRA to record the proposed rehabilitation scheme; directed BMC to undertake construction of the Municipal Ward Office and rehabilitation of eligible structures; and directed refund of premium charges paid by the developer. C. Bombay High Court Order dated 20 June 2025 The High Court initially dismissed WP No. 1612 of 2024. It held, inter alia, that the dispute involved disputed questions concerning planning and design and that the Petitioners did not demonstrate an appropriate constitutional right justifying Article 226 jurisdiction. It also held that the dispute was essentially private/contractual and that the appropriate remedy was a civil suit. D. Supreme Court Order dated 28 November 2025 The Petitioners challenged the 20 June 2025 order through SLP (C) No. 31485 of 2025. The Supreme Court modified the High Court's order to the extent that the High Court was directed to hear the challenge to the 10 January 2024 order in accordance with law. The Supreme Court expressly clarified that it had not examined the merits of the dispute. E. SRA Order dated 4 March 2025 During the present proceedings, SRA placed on record an order dated 4 March 2025 cancelling the LOI dated 11 November 2022, subject to the final outcome of the writ petition.

Issue 1 Whether the BMC was legally entitled to cancel the NOC dated 31 December 2021 issued to the Petitioners? Issue 2 Whether the developer had complied with the conditions imposed under the NOC and LOI dated 11 November 2022? Issue 3 Whether the developer had an enforceable or independent right to continue development of the BMC-owned land? Issue 4 Whether the Additional Municipal Commissioner’s order dated 10 January 2024 suffered from any legal infirmity warranting interference under Article 226? Issue 5 Whether the Petitioners could rely upon the NOC and LOI despite their failure to obtain the required approvals and submit a feasible plan satisfying BMC's requirements?

Arguments of the Petitioners The Petitioners argued that: the NOC dated 31 December 2021 had been issued after following the required procedure and obtaining legal opinion; the LOI dated 11 November 2022 was issued on the basis of the NOC; they had complied with the conditions imposed upon them; a building plan showing the BMC office area had been submitted on 6 January 2023; BMC failed to respond to that application; the cancellation of the NOC was prompted by a complaint by a local MLA/busybody; they had a legitimate expectation that the NOC would continue; they had arranged their business affairs and incurred financial consequences relying upon the NOC; and cancellation of the NOC caused substantial financial loss. They therefore sought quashing of the impugned order and continuation of the redevelopment project. BMC contended that: BMC was the owner of the land and therefore had the primary right concerning its development and utilisation; the NOC and LOI expressly required compliance with conditions concerning the Municipal Ward Office, Disaster Management Facility and Municipal Chowky; the developer had failed to construct or provide the required amenities; the developer had also failed to obtain the necessary permissions and approvals; LOI Conditions 33 and 53 specifically required various NOCs and concurrence from BMC authorities; the developer failed to produce a feasible plan meeting the requirements of the user department; the developer's proposed building was inadequate in terms of floor area, accessibility, fire safety, staircases, open spaces, parking and other requirements; and cancellation was therefore justified. The SRA supported BMC's position and relied upon its order dated 4 March 2025, which cancelled the LOI dated 11 November 2022 subject to the outcome of the present writ petition. SRA contended that the developer had failed to provide a feasible plan for more than a year after issuance of the LOI and had therefore failed to comply with its obligations.

A developer appointed for a Slum Rehabilitation Scheme does not acquire an independent right in land owned by the BMC merely because a conditional NOC and LOI have been issued. Where the developer fails to comply with the express conditions of the NOC/LOI and fails to submit a feasible development plan satisfying the landowner's requirements, the BMC, as owner of the land, is entitled to revoke the conditional NOC. Such a reasoned decision will not ordinarily warrant interference under Article 226.

On the developer's contractual rights “The developer appointed by Petitioner No.1-Society cannot have any independent rights.” The Court treated the developer's rights as contractual rights arising from its arrangement with the society. On BMC's ownership “MCGM/ BMC being the owner of the subject land will have preferential ownership…” The Court held that BMC's ownership was of particular significance because the land was being developed under an SR scheme. On non-compliance “Petitioner no.2-developer had miserably failed to comply with the conditions of the NOC and the Letter of Intent (LOI).” The Court found the cancellation order supported by the record and declined to interfere. On the conditions of the LOI The Court specifically relied upon Conditions 33 and 53, requiring necessary BMC NOCs and concurrence for the proposed Municipal Office Building, Disaster Management Facility, Cyclone Shelter Centre and Municipal Chowky.

2016 Petitioner No. 2 was appointed as developer pursuant to the General Body Resolution dated 27 February 2016. 16 September 2017 Deputy Collector, SRA requested issuance of Annexure II. 30 October 2018 Draft Annexure II was issued. 4 February 2019 Request was made to BMC's Estate Department for NOC for certification of final Annexure II. 31 December 2021 BMC Estate Department issued the NOC for issuance of Annexure II, subject to conditions. 9 February 2022 Final Annexure II was certified and forwarded to SRA. 11 November 2022 SRA issued LOI in favour of the developer, subject to conditions including obtaining necessary DP remarks and BMC approvals. 6 January 2023 Developer submitted plans showing the BMC office BUA to the Executive Engineer (DP). 28 July 2023 Developer issued legal notice seeking sanction of the DP proposal. 12 September 2023 BMC responded to the legal notice. 2023 — WP (L) No. 26148 of 2023 Developer approached the Bombay High Court concerning the failure to sanction the plans and the proposed revocation of the LOI. 8 November 2023 BMC withdrew the earlier order dated 6 September 2023 and agreed to issue a fresh show-cause notice and provide a hearing. 29 December 2023 Fresh show-cause notice issued proposing cancellation of the NOC. 2 January 2024 Hearing was conducted. 10 January 2024 Additional Municipal Commissioner passed the impugned order cancelling the NOC. 2024 — WP No. 1612 of 2024 Petitioners challenged the cancellation before the Bombay High Court. 20 June 2025 High Court dismissed the writ petition on maintainability/alternative-remedy grounds. 2025 — SLP (C) No. 31485 of 2025 Petitioners approached the Supreme Court. 28 November 2025 Supreme Court modified the High Court order and directed examination of the legality and validity of the 10 January 2024 order. 20 January 2026 Matter reserved by the Bombay High Court. 11 February 2026 Division Bench pronounced judgment and dismissed WP No. 1612 of 2024.

• Constitution of India: Article 226