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The Societies Registration Act, 1860
The Delhi Rent Act, 1995
The Indian Railway Board Act, 1905
Section 41 in The Delhi Rent Act, 1995
Section 42 in The Delhi Rent Act, 1995

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Bombay High Court
Mangesh Janardhan Mohite ... vs State Of Maharashtra And Ors. on 2 November, 2001
Equivalent citations: 2002 (5) BomCR 653
Author: H Gokhale
Bench: H Gokhale, V Tahilramani

JUDGMENT

H.L. Gokhale, J.

1. These two petitions raise important questions of law with respect to some of the provisions of Maharashtra Housing and Area Development Act, 1976 (hereinafter referred to as "MHAD Act") concerning development of acquired land as well as the provisions of the Development Control Regulations of Greater Bombay, 1991 (hereinafter referred to as "the D.C. Regulations" or "D.C.R.") and particularly Regulation No. 33(7) read with Appendix III thereof framed under the Maharashtra Regional and Town Planning Act, 1966. The petitions raise important questions concerning public policy as to whether the provisions of one beneficial scheme can be insisted to be implemented on lands acquired by the State under other provisions of a statute.

2. These questions have arisen in this matter which is concerning a large property known as "Pimpalwadi" having an area of about 5716.91 sq. metres (or 6805.78 sq. yards) situated in the Mugbhat area of Girgaon, in Southern Mumbai. It consists of eleven chawls which have become old and dilapidated. There are in all about 335 tenements therein, out of which 312 are supposed to be residential and 23 non-residential. Two of these chawls have been demolished and occupants have been living in different transit camps for a long time. A large number of tenants from amongst them have come together under the leadership of one Mr. Mangesh Mohite and some others who have formed a Society under the Societies Registration Act and they want the property to be developed through a group of builders known as "Shreepati Builders". They feel that the construction through a private builder will be quicker and better than one by an agency of the State Government. They are taking support of above-referred Regulation 33(7) read with Appendix III thereof which permits reconstruction in certain circumstances at the instance 70% of the occupiers of particular old cessed buildings in the island city coming together and arriving at an agreement for this purpose. They are supported in their submissions by the Maharashtra Housing and Area Development Authority (hereinafter referred as MHADA" or "Authority") constituted under the above-referred MHAD Act, MHADA, in justification of its position is relying upon a policy decision of the State Government dated 5th July, 1985.

3. The submissions of this group of tenants are opposed by another group of tenants and occupants led by one Mr. Kiran Shukla and others (who are occupying commercial premises also) who dispute that this Mohite group is having 70% membership. That apart, they submit that the scheme proposed by Mangesh Mohite and others and Shreepati group of builders will lead to a huge profit to this group of builders without giving any additional area or benefits to the tenants beyond what would become available under the Government scheme. The submission of this group is supported by the State of Maharashtra which contends that this Regulation 33(7) has no application to the facts of the present case. The land herein is acquired by the State Government under section 41 of the MHAD Act and the acquisition has already been upheld by this Court in an earlier judgment. There are directions/observations of the a Division Bench of this Court in that matter that this land has to be used for the purpose for which it is acquired and it cannot be allowed to be passed on to others for development. This is because whereas the surplus space available after giving the legally minimum area to the tenants of the particular property will be utilized by the builders for accommodating a rich few and making huge profits, the State Government can utilize the additional space for accommodating a larger number of persons who are dishoused due to the fall of other buildings and who are also staying in the transit camps for years together waiting to be rehabilitated. Thus, on the one hand Mangesh Mohite and others are submitting that the builder will develop the property better and quickly, may be for his profit, on the other hand, the State Government is submitting that under the law as it stands, private construction is not permissible and that the interest of similarly dishoused persons is required to be kept in mind rather than permitting additional space (which is very scarce in Mumbai and particularly southern part of it) to be utilized for the benefit of a few rich.

4. Writ Petition No. 1366 of 2001 is filed by the above-referred Mangesh Mohite and others and it is affirmed on 16th April, 2001. The State of Maharashtra is the 1st respondent. The MHADA is respondent No.

2. The Municipal Corporation of Greater Mumbai is respondent No. 3, Chief Officer of the Maharashtra (it should be Mumbai) Board for Repairs and Reconstruction is respondent No. 4 (hereinafter referred to as "the Repair Board") and respondent Nos. 5 to 12 are persons repressing the Shreepati Builders. This petition seeks a direction through its principal prayer (a) against the respondents Nos. 1, 2 and 4 from cancelling the No Objection Certificate (N.O.C.) dated 27th February, 2001 issued by respondent No. 4 to the Shreepati Group of Builders for development of this property. Writ Petition No. 1288 of 2001 is filed by Kiran Shukla and others and it was affirmed on 13th April, 2001. Respondent Nos. 1 to 4 to this petition are same as the respondents Nos. 1 to 4 to Writ Petition No. 1366 of 2001 filed by Mangesh Mohite and others. Respondents Nos. 5 to 12 thereto are persons representing Shreepati group of buildings. This petition seeks quashing of the above N.O.C. and a direction to respondents Nos. 1, 2 and 4 thereto to develop the property themselves.

5. Writ Petition No. 1366 of 2001, after its filing, was moved for an ad interim order before a Division Bench consisting of A.P. Shah and S.J. Vazifdar, JJ., on 18th April, 2001 when the Government Pleader sought time to file a reply and hence, until further orders the State Government was directed not to revoke the above referred N.O.C. The matter reached thereafter subsequent to the May Vacation when Mangesh Mohite and others moved Chamber Summons in Writ Petition No. 1288 of 2001 (with supporting affidavit dated 13th June, 2001) to join them as respondents. That prayer was granted by an order passed by A.P. Shah and S.A. Bobde, JJ., on 13th June, 2001. In a way, the chamber summons stood disposed of with that order. However that was not specifically recorded in that order and that is how the chamber summons seems to have been notified by the office along with the two writ petitions. By the same order, the Division Bench directed that both the petitions be heard together. Same Counsel have represented the respective parties in both these petitions. Thus, Mr. Naphade, Senior Advocate and Mr. Tendulkar have appeared for Mangesh Mohite and others, whereas Mr. Mukesh Vashi has appeared for Kiran Shukla and others in both the matters. Mr. Janardhanan, Additional Advocate General and Mr. R.M. Sawant, Government Pleader have appeared for the State of Maharashtra in both the matters. Mr. K.K. Singhvi, Senior Advocate and Mr. Murti have appeared for MHADA and Repair Board and Ms. Karia represented the Municipal Corporation of Greater Mumbai. Mr. Reis and Mr. Kachare appeared for the Shreepati Group of Builders.

6. The matter reached before the same Bench on 25th June, 2001 when Mr. Vashi made a grievance that the injunction was misused to carry on construction. Thereupon, Mr. Reis appearing for Shreepati group of builders made a statement that no further construction will be carried out on the plot until further orders. Thereafter the matter reached before a Division Bench of H.L. Gokhale & D.B. Bhosale, JJ., on 24th of July, 2001. On that date after hearing both the parties, the Counsel for MHADA was asked to put on affidavit as to (i) whether the developer was selected after inviting tenders, (ii) whether the N.O.C. dated 27th February, 2001 was issued after prior approval from the State Government (the Counsel for MHADA was asked to keep necessary files ready in Court) and (iii) whether in similar situations private builders have been permitted in the past. Mr. Reis, learned Counsel for the Shreepati builders, made a statement that in the meanwhile a transit building had been constructed on the site. Mr. Reis, supported by Mr. Naphade, submitted that Chawl No. 6 had become very dilapidated and hence, those who wanted to shift to the newly constructed transit building, may be permitted to do so. The Division Bench permitted such occupants to shift after giving a written acceptance that they were voluntarily shifting over there. Since it was stated that Chawl No. 6 had become dilapidated and dangerous, it was permitted to be pulled down provided the requisite N.O.C. was obtained from the B.M.C. The State Government was also directed to keep necessary records available for the inspection of the Court and to State on oath as to whether any Award for acquisition was made and the awarded amount had either been paid to the owner or deposited. Thereafter affidavits were filed by all the concerned parties and necessary papers were produced in Court from time to time. It was requested by the Counsel appearing for all the parties that the petitions be finally heard at the admission stage itself. Accordingly, the matter was argued at length on a number of dates before this Bench and finally on 2nd November, 2001 it was adjourned for verdict. We must record that on occasions, time was granted as sought on behalf of some of the parties to arrive at an understanding involving the State Government but that has not materialised. Even after the matters were adjourned for judgment, a praecipe was filed for a direction to the State Government to reconsider the matter. At that stage, however, the request was rejected on 27th February, 2002 since the matters were already adjourned for judgment.

Events and proceedings prior to the filing of the two petitions

7. (a) Before we deal with the legal submissions advanced on behalf of both the sides, it would be relevant to refer to the developments which took place prior to the filing of these petitions. Before the start of these controversies, this property was owned by Harkisondas Hospital. The trustees of this hospital sold it to one Vinit Builders Pvt. Ltd. by a Deed of Conveyance dated 25th November, 1981. The property was then acquired by the State of Maharashtra on 29th February, 1988 under section 41 of the MHAD Act and possession thereof was taken by the Collector on 31st January, 1989. The above-referred Vinit Builders challenged this acquisition by filing Writ Petition No. 625 of 1989. Another writ petition was filed by some of the occupants and particularly those occupying the commercial premises being Writ Petition No. 681 of 1989. Both these writ petitions were dismissed by a learned Single Judge (Coram : S.H. Kapadia, J.) by his common judgment dated 15th January, 1993.

(b) This judgment was challenged in appeal being Appeals Nos. 474 of 1993 and 503 of 1993. The said appeals were dismissed by a Division Bench of M.L. Pendse, J., (as he then was) and N.D. Vyas, J., by their judgment dated 6th July, 1994. The observations made by the Division Bench in para 6 are relevant for our purpose. Para 6 reads as follows :-

"It was claimed on behalf of the Builders that the aim of the developer is to provide accommodation to the existing tenants and also to offer and provide accommodations to prospective buyers and to consume the entire property to its fully utility. It is obvious that the Builder had purchased the property from the trustees of Harkisondas Narottamdas Hospital Trust with a view to make huge profits. The condition before the acquiring authority was to the effect that the Builders will provide accommodation in the developed property to the existing tenants but obviously at exorbitant rate and thereafter huge profits will be made out of the remaining tenements. The contention of Shri Korde that the scheme submitted by the Builders is more beneficial is merely required to be stated to be rejected. The Act provides additional F.S.I. for the construction undertaken by the Board than available to an ordinary Builder. It is not in dispute that F.S.I. available to an ordinary Builder is merely '2', while that available to the Board is more than '3'. The Act confers higher F.S.I. to the Board because the development of the property which will be undertaken by the Board is not only to provide accommodation to the existing tenants but also to others who are dishoused in respect of other properties in Bombay. The Board is constituted with the object to provide housing to the poor people of the City who cannot afford the purchase accommodation at huge price demanded by the Builders. The board will be in a position to provide accommodation at a reasonable rate not only to the existing tenants but also to several other needy persons. The Board is not set up to make profit and consequently, the tenants will get advantage in case the construction is undertaken by the Board than by a builder who obviously undertakes development with a commercial outlook and to make profit. It is for this reason that majority of the tenants informed the acquiring authority that they are interested in the property being developed by the Board through the scheme floated by Prime Minister's Grant. In our judgment, the learned Single Judge was right in concluding that the Builder is not entitled to claim that the acquisition should be struck down as the scheme suggested by the Builder is more beneficial." (Underlining supplied)

8. The State Government and MHADA took their own time to take further steps. An advertisement was given on 18th February, 2000 by the Repair Board for this purpose. At that stage, a suit was filed by the Pimpalwadi Bhadekaru and Rahiwasi Sangh (led by Mangesh Mohite and others) being Suit No. 2181 of 2000 in the City Civil Court at Mumbai against State of Maharashtra and MHADA and others and sought an injunction restraining them from commencing work or from taking any steps in furtherance to the proposed development of the property and an ad interim order was granted on 7th April, 2000 restraining the State of Maharashtra and MHADA from commencing work or from taking any steps. This is so averred in para 3(m) of Shri Mohite's Writ Petition No. 1366 of 2001. This petition further states in paragraph 3(o) that-

"In the meantime since most of the tenants had approached the respondents Nos. 5 to 12 (Shreepati Group of builders) for agreement to develop this property, negotiations started between the Association of petitioners and the respondents Nos. 5 to 12 for the purpose of exploring the possibility to see whether the property could be developed."

Writ Petition No. 1366 of 2001 by Mangesh Mohite & others

9. What is averred in para 3(p) of this petition is quite significant, which reads as follows :-

"By their letter dated 20th September, 2000 addressed to Shri Mangesh Mohite, President of Pimpal Wadi Bhadekaru & Rahiwasi Sangh from respondent Nos. 5 to 12 it was recorded that a meeting to consider the redevelopment of the Pimpalwadi was held at the instance of Shri Sachinbhau Ahir, Chairman of MBR & R Board, keeping in mind D.C.R. 33(7), 33(9) under which 225 sq. ft. carpet area is required to be given to tenant/occupant occupying less than 225 sq.ft. carpet area, persons holding area between 225 sq. ft. to 753 sq. ft. are to be provided an area equal to area occupied by them and any person holding more than 753 sq. ft. to be provided 753 sq. ft. area and further pointed out that it was not possible for developers to increase the area of any person as it would make the project non-viable for them."

The above referred letter of 20th September, 2000 records in paragraph 2 thereof that in view of Mr. Mohite's continuous request for giving 300/350 sq. feet carpet area to the existing tenants/occupants it was being stated as follows :-

"You are aware that Pimpalwadi has been acquired 20 years before and a lot of litigations are pending also political problems are already there which we emphasised. However on having moral support from the Chairman to go ahead with the redevelopment of Pimpalwadi project and on having agreed that all the tenants/occupants would stand by you we orally agreed to redevelop this property. We have also seen viability of the project and if any tenant demands more area than the area prescribed in the policy, the project will become unviable as there are a lot of various other expenses like getting the litigations cleared, purchasing the property from M/s. Vinit Builders (P) Ltd., subject to having your co-operation, reimbursing the amount of MHADA for the expenses already incurred by it, reimbursement for the cost of transit accommodation after grant of N.O.C. and other miscellaneous expenses which cannot be visualised or put on record."

In the last paragraph the letter states:-

"You should thank the Chairman who has taken keen interest in the redevelopment your Pimpalwadi......."

10. Thereafter this petition refers to the reply of the petitioners to the above-referred letter dated 20th September, 2000 from Shreepati Builders. This reply dated 28th September, 2000 appreciates the redevelopment done by Shreepati Builders in Nana Chowk area of Mumbai and then clearly states in para 2 that the tenants do not intend to give co-operation to MHADA for reconstruction and according to them the quality of construction of MHADA is very poor. "The planning, general amenities etc. provided by MHADA are not upto the mark and in many cases due to lack of funds, the schemes which have commenced do not get implemented and linger for a number of years. Even the tenants who are put in transit accommodation suffer due to lack of basic amenities". Thereafter para 3 states that the petitioners are not willing to shift into any transit camp as the education of their children and their work places are in the same vicinity and if they are shifted into the transit camp, the education and the work of the occupants will suffer. Thereafter at the end of that paragraph, it is stated that- "So, as tenants we have taken decision that we will not get the property developed by MHADA and accordingly we have filed a suit in the City Civil Court of Mumbai and injunction is granted against development by MHADA". Thereafter the letter makes a request to Shreepati Builders to negotiate with the owners of the property M/s. Vinit Builders for purchase of the property and then it may be discussed with MHADA for redevelopment. Thereafter it states that their basic terms and conditions for redevelopment which are as follows :-

"1) Our tenants should not be shifted outside the property for transit accommodation. We agree for transit accommodation on the same plot area.

2) We should be given permanent alternate accommodation as per D.C.R. 33(7).

3) We have in all 338 Tenements in which you have to provide alternate accommodation as follows :

(a) 125 Tenement of 225 sq. ft. Carpet Area each.

(b) 190 Tenement of 250 sq. ft. Carpet Area each.

(c) 23 N.R. uses to be provided on actual Carpet Area.

4) We should be assured of good quality construction with good amenities such as those provided in your Nanachowk scheme.

5) The project should be completed and all the tenants should be rehabilitated within 24 months from the date of shifting into transit accommodation and C.C. for each wing.

6) All tenants should be provided with ownership rights and a co-operative society should be formed on completion of the project."

11. Thereafter we have a letter of Shreepati Builders dated 3rd October, 2000 addressed to the petitioners which states that they have discussed the matter regarding purchase of the property with Vinit Builders and the said Vinit Builders have agreed to surrender their rights as owners in favour of them. A token of Rs. 5 Lacs has been given to them as an advance towards the purchase of the property. Thereafter it is stated that they have studied the requirements of the petitioners and have agreed for the same. Then we have on record a letter of Shreepati Builders dated 17th October, 2000 addressed to the Chief Officer of respondent No. 4 Repair Board. This letter states that it is written on behalf of the owners of the property. It is stated therein that Vinit Builders have executed a Power of Attorney dated 5th October, 2000 in their favour and have agreed to execute a conveyance in their favour. It is further stated that majority of the occupants have approached them and submitted a letter dated 28th September, 2000 to execute the scheme of redevelopment. The letter then states-

"On 5th October, 2000 a meeting was held by the President (MHADA) in the presence of Hon. Chairman (MBRRB), C.O. Saheb, other officials and Mr. Mangesh Mohite, the President of Pimpalwadi Bhadekaru and Rahewasi Sangh & a detail discussion took place & concluding the meeting Mr. Mangesh Mohite was advised to submit 70% of consent of occupants for scheme of re-development under D.C.R. 33(7) within a month's time."

Thereafter it states that some 230 cessed tenants and 23 non-cessed tenants i.e. 74% occupants have given irrevocable consent letters immediately. Along with this letter, they enclosed the pre-requisite documents, plans, applications, etc. along with the irrevocable consent letters. The letter further makes a request that the property may be de-requisitioned and N.O.C. be granted in favour of Shreepati Builders. This letter is followed by their letter dated 15th November, 2000 forwarding 14 more consent letters taking the tally to 79% as the letter states. One such irrevocable consent is annexed at Exhibit "H" to the petition. It is executed by the 1st petitioner on 10th October, 2000. This document gives irrevocable consent to the development of the property in accordance with D.C. Regulation 33(7). The signatory agrees to the development of the property by the Power of Attorney holders of the landlord i.e. Shri M.N. Purohit & R.R. Chaturvedi of Shreepati Group of Builders. It provides for shifting to the transit camp and subsequent allotment of a tenement having minimum area of 225 sq. feet and maximum 753 sq. feet depending on present area of signatory under occupation. This document however nowhere states that 70% of tenants and landlord have formed a Co-operative Society or they intend to form one or who are its promoters etc.

12. Thereafter we have on record a letter of Shreepati Builders addressed to the Chief Officer of respondent No. 4 dated 30th of November, 2000 which refers to the earlier proposal (of 17th of October 2000) forwarded with consent of 79% of tenants for F.S.I. 2.5. It refers to the alternative proposal of developing the property in Joint Venture with F.S.I. 4 which emerged in the earlier discussion with the Chief Officer. Para 2 of this letter states:-

"During the discussion you goodself had pointed out an alternative approach for the redevelopment and suggested to us to think and consider for your proposal of "Joint Venture" and redeveloping the property with F.S.I. 4, wherein we have to carry out the work with the provisions stated in revised D.C.R. 33(7) with benefits of F.S.I. 2.5 and providing alternative accommodation to all the existing tenants/occupants and benefits above the F.S.I. 2.5 to F.S.I. 4 can be shared on terms and conditions mutually arrived at and agreed by the Board and ourselves."

Then it records some 9 points which emerged in that discussion. In Point No. 5 it is stated that MHADA will get a fixed profit of 50% as per the negotiated terms which on a rough basis will be approximately Rs. 4 crores. Point No. 4 of these terms is as follows :-

"4. The site management, execution of work, entering into agreements with tenants, transfer of rights to the tenants, collection of rent from the tenants, negotiating with the prospective flat buyers and selling amounts from the flats including signing of the agreements, collecting amounts from the flat buyers etc...., And the management affairs regarding the redevelopment shall be done by the Shreepati Group."

The letter encloses therewith a chart showing salable built up area of 38,000 sq. feet at F.S.I. 4. Though the actual cost of construction is calculated at Rs. 1500/- per sq. feet, various additions are made therein to arrive at total construction cost of Rs. 7,10,50,000/-. The sale price is taken as Rs. 4000/- per sq. ft. to arrive at sale proceeds of Rs. 15,20,00,000/- leaving the balance profit of Rs. 8,09,50,000/-.

13. Thereafter we have a letter from the Chief Officer of respondent No. 4 dated 7th December, 2000 which acknowledges the receipt of the proposal for grant of N.O.C. with F.S.I. 2.5 with the irrevocable written consent of 80% tenants/occupants. This letter also records that they have received a letter of Shreepati Builders regarding entering into the Joint venture with MHADA for development of the above stated property with F.S.I. 4. The letter further states that "the said proposal is under our active consideration & we will communicate to you shortly regarding further terms and conditions of the Joint Venture". This letter is followed by another letter from the Chief Officer of respondent No. 4 dated 18th January, 2001 which states that MHADA is willing to enter into a Joint Venture "subject to the Government's final sanction to the Joint Venture policy, which has been principally approved in the authority's meeting". The letter thereafter states that Shreepati Builders may go ahead with preparation of the plans and appointment of Architect from the Board's panel.

14. In the meanwhile, this Pimpalwadi Bhadekaru Sangh had filed an appeal from Order (Stamp) No. 522 of 2000 against the order of the City Civil Court dated 8th September, 2000 in Notice of Motion No. 1532 of 2000 in the above-referred suit. The State Government and MHADA were respondent Nos. 1 and 2 respectively. Vinit Builders and R.R. Chaturvedi and others (of Shreepati Builders) were respondent Nos. 3 and 4. During the pendency of that appeal, Shreepati Builders purchased the rights and interest of Vinit Builders in this property on 6th November, 2000. Thereafter an understanding was arrived at amongst Pimpalwadi Bhadekaru Sangh, MHADA and R.R. Chaturvedi in this appeal from order before a learned Single Judge (Coram : R.M. Lodha, J.) The Minutes were tendered by the Counsel appearing for the appellant, respondent No. 2 and respondent No. 4 and the learned Single Judge passed an order in terms of these Minutes of Order on 24th January 2001. Paragraph 3(ad) of the petition makes a reference to these minutes and the order.

15. What is material to note is that the Minutes are signed only by the Counsel for the appellant, respondent No. 2 (MHADA) and respondent No. 4 (R.R. Chaturvedi of Shreepati Builders) and in the Minutes, it is agreed that the appeal was being withdrawn against respondent No. 1-State of Maharashtra and respondent No. 3-Vinit Builders. The Minutes referred to the new policy of respondent No. 2 (MHADA) and the proposed Joint Venture between respondent No. 2 and respondent No. 4 and they make it clear that re-development of the property will be subject to the approval of respondent No. 1 (State of Maharashtra). Thus, it is clear that the State of Maharashtra is not a party to these Minutes. The full text to these Minutes dated 4th day of January, 2001 reads as follows :-

"MINUTES OF ORDER

The present appeal from order is disposed of in terms of Minutes as under :

1. Parties agree that the new policy of the respondent No. 2 permits redevelopment of the cessed suit property in the City of Mumbai in a joint venture with consent of lawful occupants as envisaged under the said policy.

2. In view of the said policy of respondent No. 2, appellants agree that the suit property shall be redeveloped by the respondent No. 2 in Joint Venture with respondent No. 4 on the terms and conditions which are mutually agreed by and between respondent No. 2 and respondent No. 4 subject to approval of respondent No. 1.

3. Appeal is withdrawn against respondent Nos. 1 and 3.

4. In view of the above, the appellant undertakes to withdraw the suit filed by it in City Civil Court of Greater Mumbai being L.C. Suit No. 2181 of 2000.

In view of the same the appeal from order is disposed of.

Dated at Mumbai this 4th day of January 2001.

Sd/-

S.M. Tendulkar

Advocate for appellants

Sd/-

Advocate for respondent No. 2.

Sd/-

Advocate for respondent No. 4."

16. It is material to note that these Minutes were tendered before the learned Single Judge on 24th January, 2001 and although the same Assistant Government Pleader was shown as appearing for respondent No. 1 (State of Maharashtra) and respondent No. 2 (MHADA), the order marks it clear that the learned A.G.P. had appeared by waiving service for respondent No. 2 (MHADA) only. In fact, para 4 of the order makes it very clear that respondent No. 1 was not served and service on respondent Nos. 1 and 3 was dispensed with. The order passed by learned Single Judge on 24th January, 2001 reads as follows :-

"High Court, Appellate Side, Bombay.

Pimpalwadi Bhadekaru and Rahiwasi

Sangh. ... ... Appellant

(Orig. Plff.)

V/s.

1. State of Maharashtra

2. Maharashtra Housing & Area Development Board.

3. Vinit Builders Pvt. Ltd.

4. R.R. Chaturvedi, M.N. Purohit & others ... ... Respondents (Nos. 1 to 3 being orig. defendant and No. 4 being Intervener)

Being Appeal from Order Stamp No. 522/2001.

preferred against the judgment & order dated 8-9-2000 passed by the Judge, City Civil Court, Mumbai in Notice of Motion No. 1532 of 2000.

Mr. S.M. Tendulkar for Mr. Mayure N. Kargatia for appellants. Mr. D.R. More, A.G.P. for State-respondent Nos. 1 and 2. Mr. J. Reis for Mr. Rajesh N. Kachare respondent No. 4.

CORAM : R.M. LODHA, J.

DATE : 24-1-2001

P.C.

1. Not on board.

2. In view of the prayer made by the learned Counsel for the appellant, respondent Nos. 2 and 4, papers were got produced since, the learned Counsel appearing for the said parties submitted that the said parties want an order in terms of minutes of order.

3. Admit.

4. Mr. D.R. More, A.G.P. waives service for respondent No. 2, Mr. J. Reis, learned Counsel waives service for respondent No. 4. Service on respondents 1 and 3 dispensed with.

5. The learned Counsel appearing for the appellant, respondent No. 2 and respondent No. 4 have tendered minutes of order marked "X" for identification purposes.

6. Appeal from order is disposed of in terms of minutes of order. No costs.

Certified copy expedited."

(All underlining supplied)

17. Thereafter there is a letter of Shreepati Builders to the tenants dated 27th January, 2001 on record informing the tenants of Pimpalwadi staying in the transit camp of MHADA that they have submitted a proposal to MHADA for grant of N.O.C. and to pursue their application under revised D.C.R. 33(7) for the redevelopment of the property. It further states that they are moving ahead with MHADA for the Joint Venture also. The letter asks the tenants to sign the necessary irrevocable consent letters and states that from date of signing that letter, rent payable for the MHADA transit camp will be borne and paid by them. Thereafter in the last paragraph, it states that bhoomi pujan has been organised by the co-tenants and that the tenants occupying the MHADA transit camp may as well attend that. Then the petitioners have placed on record a letter from the Chief Officer of respondent No. 3 dated 31st January, 2001 addressed to Shreepati Builders informing them that the Government had in principle approved the Joint Venture policy for redevelopment of old cessed property in Mumbai and the proposal of Shreepati Builders for the Pimpalwadi property was under active consideration. It further states that however the M.O.U. will be signed only after receiving the Government's approval to the scheme in writing.

The disputed N.O.C. dated 27th February, 2001.

18. Lastly we have the N.O.C. dated 27th February, 2001 which is the disputed document in this matter. The operative part of the N.O.C. reads as follows:-

"With reference to the above subject matter and letter under reference 'No Objection Certificate' is hereby granted for redevelopment of captioned property with F.S.I. 2.5 or the F.S.I. required for rehabilitation of existing occupiers plus 50% incentive F.S.I., whichever is higher, in accordance with the modified D.C. Regulation 33(7) and Appendix-III to this Regulation 33(7) sanctioned by the Government in Urban Development Department, Mantralaya vide notification published in Government Gazette dated 25th January, 1999, subject to the following terms and conditions.

1) All the occupants of the old building shall be reaccommodated in the redeveloped building. Each occupant shall be rehabilitated and given the carpet area occupied by him for residential purpose in the old bldg., subject to the minimum carpet area of 20.90 sq. mtrs. (225 sq. ft.) and/or maximum carpet area 70 sq. mt. (753 sq. ft.) as provided in the MHAD Act, 1976. In case of non-residential occupier, the area to be given in reconstructed building will be equivalent to the area occupied in the old building.

2) ....

3) ....

4) You will have to furnish the certificate from the concerned officer of M.C.G.M. to the effect that the repair cess is paid up-to-date before demanding part/full occupation certificate to the newly constructed building.

5) During the period of reconstruction, you will have to provide temporary transit accommodation to the occupiers of old building. Such Transit Camps if constructed on the same plot should be demolished within one month from the date of occupation certificate granted by M.C.G.M. for the reconstructed building. You will have to deposit an amount of Rs. 6,91,000- towards the advanced rent for the period of 2 years at the rate of Rs. 600/- per month for 48 numbers of tenant/occupants who are presently staying in the Board's Transit Camp, for which you shall approach the office of Estate Manager (TC), 2nd floor, Griha Nirman Bhawan, Bandra (E), Mumbai 51.

6) .....

7) The exact surplus built up area if any as provided in the Table in the 3rd Schedule of MHAD Act, 76 to be made available to the M.B.R. & R. Board on payment of an amount as may be prescribed under MHAD Act, 76 shall be communicated to you after you submit to this office the plans of proposed buildings with the permissible F.S.I., which have been approved by M.C.G.M.

8) .....

9) .....

10) ......

11) N.O.C. for occupation certificate or the free sale buildings will be given only after all the old occupants, including those who may be staying in the Board's transit camp, have been rehoused in the newly constructed building(s) and only after surrendering surplus built-up area as per 3rd Schedule of MH & AD Act, 1976, if any.

12) ......

13) ....

14) The redevelopment of the captioned property by way of Joint Venture between MHADA and you with F.S.I. 4.00 will have to be undertaken in accordance with policy and terms and conditions as may be approved by Government Housing and Special Assistant Department, Mantralaya in case of redevelopment of cessed properties in the Island City of Mumbai through Joint Venture.

15) This N.O.C. is issued with a reference to be made to recommend the Government to cancel the approval accorded by Government for land acquisition under section 41(1) of MHAD Act, 1976."

(All underlinings supplied).

19. Then this Mangesh Mohite and others have placed on record the fact that some 42 of these tenants (Amritlal Tated, Kiran Shukla & others) withdrew the consent given by them for this reconstruction to be done by Shreepati Builders. A photo copy of the letter dated 17th March, 2001 signed by these 42 persons and addressed to Shri R.R. Chaturvedi of Shreepati Group of Builders withdrawing consent is annexed at Exhibit 'U' to the petition. A copy of this letter is forwarded to respondent No. 4 (Repaid Board) and respondent No. 2 (MHADA). All these 42 persons are from chawl Nos. 1 to 3. Then we have a letter dated 25th March, 2001 from Shreepati Builders addressed to Shri Amrutlal Tated (for these 42 persons) informing them that they cannot withdraw the irrevocable consent once given. The letter states that "such sort of mischief may lead into a legal problem whereby damages can be claimed from each of the individuals who have signed your above referred letter.........." Thereafter this Amrutlal Tated, Kiran Shukla and others have written one more letter on 27th March, 2001 to Shreepati builders stating that inspite of repeated requests they were not informed about the development of the work since the beginning. The letter states that in blind trust the tenants have signed the papers trusting the Committee and Builder. But afterwards they were informed that "now negotiations with the tenants and the said developer/builder will not be held. Now you have signed the papers, so you are bound forever. You will not get more than 250 Square feet area". The letter, therefore, makes an inquiry as to how much area is offered, what amenities will be given etc. and states that the tenants were not given either duplicate copy or photo copy of the irrevocable consent letters. As far as this letter is concerned, in fact, many more apart from above referred 42 persons have signed it. Then, we have one more letter from Amrutlal Tated and others received by Shreepati Builders on 31st March, 2001 which seeks a meeting in "free atmosphere where they can express their views without any fear or favour" and on which there is an endorsement from Shreepati Builders that the meeting can be held in their office "without psycho fear". Thereafter this Tated, Shukla and others by their letter dated 7th April, 2001 have withdrawn their basic membership from Pimpalwadi Bhadekaru Sangh led by Mangesh Mohite and others and a copy of that letter is forwarded to respondent No. 4. On 10th April, 2001 they have written to Shreepati Builders inquiring as to how they have started collecting rent by virtue of their intimation on 31st March, 2001 and as to who is the correct owner of the property.

20. The petitioners-Mangesh Mohite and others have thereafter annexed a copy of the Municipal notice dated 21st March, 2001 addressed to Shreepati Group of Builders demanding the arrears of repair cess. In para-3(am) of the petition it is stated that arrears are mounted to Rs. 19 lacs and the said letter states that in view of the N.O.C. dated 27th February, 2001 the demand was made on Shreepati Builders. Thereafter the petitioners have annexed the letter dated 11th April, 2001 by Shreepati Builders to Amrutlal Tated and others informing them that there was no question of entertaining any parallel tenants association and as far as ownership is concerned the earlier letter of 31st March, 2001 is referred which states that Shreepati Builders had purchased the property from Vinit Builders and that is how the tenants were required to pay rent to them. This is how the petition by Mangesh Mohite and others seeks to explain approvingly the demand of repair cess and rent made by Shreepati Builders on the tenants.

21. Thereafter this petition states in paragraph 4 that the petitioners had to go through lengthy process for forming themselves and getting Shreepati Builders to provide for alternative accommodation. It is then stated that some power brokers tried to break the tenants association by reducing some 40 to 41 tenants to form a parallel association. Then a specific allegation is made as follows :-

"In this regard, the petitioners have very reliably learnt that one politician of the ruling party Shri Chandrashekar Prabhu is trying to take undue interest in the matter and apparently trying to see that the project is taken over by him for development with some of his builders who are his henchmen."

In fact, on learning that the Chief Minister has issued a stop work order they have addressed a letter to the Chief Minister Shri Vilasrao Deshmukh on 12th April, 2001 wherein a specific allegation is made as follows :-

"Though the Government is aware of it, it is only because of egoistic and destructive attitude of Ex-MLA Chandrashekhar Prabhu and Ex-Chairman of the Repair Board and General Secretary of B.J.P. Shri Madhu Chavan, the scheme was dragging on for a number of years and today, i.e. on 12-4-2001 we the tenants have come to know that due to the insistence of these two persons Hon'ble Chief Minister has orally directed to stop the work of the said scheme and accordingly developer has stopped the work."

Then some newspaper cuttings are annexed recording the news items about this Pimpalwadi scheme and the stop work order. Photos showing the condition of the buildings are also attached thereafter to the petition.

22. The main thrust of this petition is on what is stated in para 3(aq) and para-7. In para 3(aq) it is stated that similar N.O.Cs., had been given in accordance with the provisions of the MHAD Act to at-least ten other owners and tenants under similar conditions and in para-7 it is stated this N.O.C. has been granted as per the guidelines issued by respondent No. 1 in 1985 and entire philosophy of MHAD Act which encourages reconstruction of cess buildings by tenants with the help of landlord/developer. It is specifically stated that it is not a joint venture at all between respondent No. 4 and respondent Nos. 5 to 12. It is then stated in para 3(ar) that Shreepati Builders have begun the work of proposed development by seeking the approval of the local authorities to the plan. They have done soil testing, constructed temporary transit camp and have already spent a large amount for this purpose. Now, suddenly the work is likely to be stopped and, therefore, it had become necessary to file the petition and seek an injunction restraining the respondents from cancelling the N.O.C. dated 27th February, 2001.

State Government's policy of 5th July 1985

23. The policy letter of the State Government dated 5th July, 1985 is annexed at Exhibit 'C' to the petition. It is a letter addressed by the under Secretary of the Government of Maharashtra from the Housing and Special Assistance Department to the Administrator of MHADA. The subject of the letter as mentioned in its caption is as follows :-

"Regarding old and dilapidated cessed buildings in Mumbai City ........ Scheme of reconstruction, issue of No Objection Certificate and 34 reconstruction schemes proposed to be undertaken by the authority."

This communication is thus regarding old and dilapidated cessed buildings in Mumbai City, particularly in the context of 34 reconstruction schemes, whose list is enclosed therewith and Pimpalwadi is mentioned at Sr. No. 4 of this list. In para 2 of this policy decision, it is stated as follow :-

"Large number of families have been residing in Transit Camps for a period of more than 10 to 15 years. Authority was advised to select sites where additional premises on a large scale would be available for rehabilitation of these families at an early date under reconstruction schemes. Accordingly, the authority had selected 34 such sites."

Thereafter it is stated that pursuant to the discussion with the officers of the authority (i.e. MHADA) it was decided that instead of considering some sites only out of the said sites, a policy decision should be taken in respect of the old and dilapidate buildings. Out of these 34 sites, N.O.C. was already issued with respect to two sites. Therefore, with respect to remaining 32 sites, the Government recorded the following decision:-

".......it was decided that instead of considering some sites only out of the said sites, a policy decision should be taken in respect of all the old and dilapidated buildings. Tenants and landlords should be made to participate in it. Liability towards rent in respect of premises under reconstruction scheme should be gradually reduced. Accordingly, the Government has taken a decision on 7-2-84 to make tenants and landlords participate in this programme and sanction them F.S.I. of 2 or F.S.I. actually used, whichever is more, as and by way of incentive."

Pursuant to the above decision, policy in respect of these 32 sites has been reviewed and the Government is passing the following orders:-

"(1) Out of these 32 sites, except for the sites where land acquisition action has been completed and construction work of the buildings is in progress as per reconstruction scheme, in respect of other sites, No Objection Certificate should be issued to co-operative societies of landlord/tenants.

(2) With regard to the sites where land acquisition action is being taken, if the landlords are ready to implement reconstruction scheme and are not ready till such time land acquisition action is stopped, but if the tenants are ready to implement said scheme of reconstruction, then land acquisition action should be continued.

(3) In respect of the sites where land acquisition action has not been initiated, if the landlords do not come forward with proposal for reconstruction and if the tenants come forward with such a proposal, the action to acquire the land should be initiated.

(4) In respect of the sites where land acquisition as been completed but work of reconstruction has not been started, if the co-operative society of the landlords and residents of the building requests for redevelopment of the site, the residents there ought to be accommodated in the scheme. Also, such a land should first be allotted to the concerned co-operative society on licence basis and on completion of a building, the land should be leased for a term of 90 years. Out of the surplus premises, premises in proportion to the percentage prescribed in the enclosed chart should be allotted to Mumbai Housing & Area Development Board for rehabilitation of those residing in the Transit Camps and No Objection Certificate should be issued subject to this condition."

Reply of the State Government and rejoinders by Mr. Mohite.

24. On behalf of the State Government, a reply was filed by one Shri L.D. Vyas, Deputy Secretary of the Housing Department, affirmed on 3rd July, 2001. In this reply, firstly, there is a reference to the statement made before the Division Bench (in the matter referred to earlier and as recorded in the said judgment) that the property will be developed by MHADA within a period of 6 years. In para-6 it is stated that after the land was acquired it vested in the authority and it ought to be used for the purposes for which it has been acquired. This statement has been subsequently corrected by filing another affidavit by Mr. Vyas, affirmed on 2nd November, 2001 which states that the property vests in the State Government free from all encumbrances in view of the provisions of section 41(3) of the MHAD Act. It is stated that the earlier statement (that the property vests in the authority i.e. MHADA) was obviously a mistaken one. It is then stated that since the land is acquired at the behest of MHADA, it cannot be transferred to others by issuance of N.O.C. for the development. As far as the policy of joint venture is concerned, it is stated in para 7 that it was still at the stage of formation. On the role of Shri Chandrashekar Prabhu, it is stated in para 8 that he was the Chairman of the Advisory Committee of the Housing Department and Government of Maharashtra obtained his opinion from time to time as he is an expert on this subject. It is then specifically stated in para 9 that the Government letter dated 5th July, 1985 was not applicable to the present case as there was no Co-operative Housing Society of the landlords/occupants which had requested for development of the property.

25. To this affidavit of Mr. Vyas dated 3rd July, 2001, a rejoinder is filed by Shri Mohite on 9th July, 2001. It is stated therein that 35 occupants have already shifted to the transit building on site constructed by Shreepati Builders and 48 families are in transit camp in distant suburbs. It is contended that the owners and 92% of the tenants have approached MHADA for development of this property and there was no illegality in the N.O.C. granted. Later on, it is stated in paragraph 8 that number of tenants who had separated were around 58 from them (i.e. along with Kiran Shukla and others) and that was because of the instigation by Shri Prabhu. As far as the judgment of the Division Bench is concerned it is stated that it was in the context of the Prime Minister's grant project and at that time money was available with MHADA. Now, the circumstances have changed. As far as the acquisition by the State Government is concerned, it is stated that it was all on paper and the Government has never displayed its ownership rights either by collecting rent or paying taxes. It is then contended in paragraph 17 that through the N.O.C. what is done is only to give a licence to the tenants through their Chief Promoter to start the development work. The ultimate transfer will be in the form of lease in favour of the society. To this reply copies of the approval given by the State Government to such similar scheme at Mathura Bhavan at Dadar, Irani Chawl at Lower Parel and Raowadi at Mahim are annexed.

26. Shri Chandrashekar Prabhu, against whom Mr. Mohite has made allegations, has thereafter filed an affidavit affirmed on 10th September, 2001 denying those allegations. In para 1 of his reply he has stated that he was the Chairman of the Advisory Committee, Department of Housing appointed by the State Government from April 2000. In para 2 he has stated that he was an Architect by Profession and has never worked for any builder or developer. He has taught in various architectural institutions and written papers and articles on issues of housing and urbanisation. He has denied that he has taken any undue interest to thwart the project as he has maintained that MHADA should take the plot. He has averred that the allegations against him are false, baseless and defamatory and has sought leave to initiate legal proceedings for the same.

27. (a) Then we have a further affidavit of L.D. Vyas affirmed on 10th September, 2001. It is in reply to Mr. Mohite's affidavit as well as in reply to the affidavit of one Pradip Trivedi of the Repair Board filed in the connected Writ Petition No. 1288 of 2001. (The affidavit of Mr. Trivedi will be referred to later on while dealing with Writ Petition No. 1288 of 2001.) Mr. Vyas has stated therein that the Policy of 1985 applied where the tenants formed a Housing Society and that it was not applicable to the present case. Besides, he has pointed out that the acquisition for the present property commenced much after this policy came into force and it was completed in 1989. The Policy of 1985 applied to properties which were cessed properties. The acquired properties no longer remained cessed properties after their acquisition by the State. The MHAD Act envisages three different types of acquisition under sections 41, 92-93 and 103B and each section can be invoked only if the conditions stipulated therein were satisfied. The acquisition under section 41 was available only for the purpose for which the land was acquired and it could not be handed over to a third party. In such an acquired property the tenants cannot decide the manner in which the property is to be developed. He has further pointed out at the end of para 2(a) that more than 127 tenants had written to the Government withdrawing their consent and that they had been misled.

(b) Then Mr. Vyas has pointed out that there has always been a practice of inviting tenders for developing such properties and even for this very property tenders were invited in 1989 and as recently as in February 2000, and a copy of the advertisement of 1989 is enclosed. With respect to the N.O.Cs. given by the Board, he has pointed out that in all such matters it is the State Government which had first granted the approval and then the N.O.C. was issued. Present one was the first case where the Chief Officer acted in this manner to issue the N.O.C. disregarding the State Government and without the prior approval of the State Government. He has submitted that the Repair Board has given no reasons as to why the property could not be developed by it. As the matter involves distribution of state largesse, all relevant facts ought to be considered. He has, therefore, submitted that the repair Board should be directed to reconstruct the property within a time frame by paying off legitimate expenses so far as incurred by respondent Nos. 5 to 12 which are found to be admissible after the grant of N.O.C., or MHADA be directed to invite tenders for the same so that transparency could be achieved in the entire process.

(c) Lastly, Mr. Vyas has stated that the State Government was contemplating to issue directions under section 164 of the MHAD Act but since the matter was sub-juice that was not done.

28. To the above-referred affidavit of Mr. Vyas, there is one more rejoinder by Mr. Mohite affirmed on 25th September, 2001. It is stated in this affidavit that the purchase of the property by Shreepati Builders was only for obviating any obstacles in the development by the erstwhile owners i.e. M/s. Vinit Builders. He has further stated that even if the State Government has acquired the property the sense of acquisition was for development and precisely the same thing was being done. It is thereafter stated that in the instant development nothing more is being achieved than what is permissible under the guidelines. In para 4 of this affidavit, it is stated that the fact of consent of 92% of the tenants was verified by the Engineers of respondent Nos. 2 and 4 on site and have made such a report. On the two tenders for Pimpalwadi (referred by Mr. Vyas), he has commented that the 1989 tender was under the Prime Minister's project and it had been since closed. The tender of February 2000 was for constructing one building for 64 tenements which collapsed way back in 1972 and not for the development of the entire project. He has further stated that the above-referred Mathura Bhavan, Raowadi and two others were the properties acquired under sections 41 and 93. With respect to the submission of inviting tenders, it is submitted in this affidavit as follows:-

"..............it is pertinent to mention that in all these cases of development under D.C. Rule 33(7), what is to be provided for to the tenants, what is to be given to MHADA and the area which N.O.C. holder can sell to the outsider, is fixed under the provisions of law itself. It is a water-tight provision of law which cannot be deviated and, therefore, in such cases the prime importance is confidence to be obtained by the promoter/developer from 70% and/or more tenants and once a promoter/developer obtains confidence which culminates into a consent for development by such tenants, such proposals become feasible and operative. Therefore, the question of inviting tenders would never achieve results. By inviting tenders, the entitlement of the N.O.C. holder to sell flats to outsiders can not be increased or decreased since what is to be provided to the tenants, what is to be paid to the respondent Nos. 2 & 4 and how an excess, if any, is to be utilised is all provided under one umbrella, viz. the said D.C. Rule 33(7) and Schedule 3."

29. It is material to note that no reply was filed to this petition by respondent No. 2 MHADA or by respondent No. 4 Repair Board as well as by respondents Nos. 5 to 12 i.e. Shreepati Builders. They however filed their replies in the companion matter, i.e. Writ Petition No. 1288 of 2001 for certain purposes and since both the matters were to be heard together, those replies were requested to be looked into for the purposes of this writ petition also.

Writ Petition No. 1288 of 2001 by Kiran Shukla & others

30. As narrated above, this writ petition was filed by Sarvashri Kiran Shukla, Amrutlal Tated and others who are opposed to the development of the property by Shreepati Builders. They were initially part of the Pimpalwadi Bhadekar Ani Rahiwasi Sangh, i.e. the group led by Mangesh Mohite and others. They were dissatisfied with the role played by Mangesh Mohite and others and the facilities which were to be provided by Shreepati Builders and others. They are of the view that this property ought to be developed by the State Government or by MHADA itself and not by these developers inasmuch as the developers are not offering to the tenants any more space or amenities as against the one under the Government Scheme.

31. This petition also refers to the earlier developments as referred to hereinabove including the fact that the property was initially purchased by Vinit Builders and that Vinit Builders had filed a writ petition and thereafter filed an appeal and both of which came to be dismissed. This petition filed on behalf of 59 of the tenants whose names are listed in Exhibit-A to this petition. To this petition, a letter dated 5th April, 1995, which was given by Vinit Builders to Bhadekaru Ani Rahiwasi Sangh, is annexed as Exhibit-B. That letter records in para 3 thereof as follows :-

"As desired by you, we hereby agree that in case we get 2.5 F.S.I. for the whole area of the plot, then we shall give you tenements consisting of carpet area as desired by you and your members which is as under :

1. 300 sq. ft. for tenants having 120 sq. ft. area and above.

2. 250 sq. ft. for tenants having 120-180 sq. ft.

3. 225 sq. ft. for tenants having upto 120 sq. ft.

4. 50 sq. ft. extra for each godown then the areas they are occupying at present which is in total 6,000 sq. ft."

32. It is submitted that as against this earlier offer of Vinit Builders, what is being offered by Shreepati Builders is nothing more than what would be available in a statutory scheme. As against that, much earlier, the Vinit Group of Builders had offered an area to the tenants which could have been larger than what is being offered by Shreepati Builders. Yet, as recorded in the Division Bench judgment referred to earlier, a majority of the tenants had then informed the Acquiring Authority that they were interested in the property being developed by the Board through the scheme floated by the Prime Minister's Grant and not by the private builders (i.e. Vinit Builders). It is stated in the petition that what is being offered by Shreepati Builders is not arrived at after full disclosure and free consent of the tenants concerned. It is stated in para 11 of the petition that the tenants were told to sign an irrevocable consent letter on a representation that on a no objection certificate being granted, negotiations will be held with the tenants regarding the areas to be allotted to them. However, it was observed by Kiran Shukla and others that there was no attempt to take the tenants into confidence and therefore vide letter dated 27th March, 2001 addressed to the Repair Board, it was recorded by them that Bhadekaru Ani Rahiwasi Sangh was not representing the signatories to that letter. Thereafter it is pointed out that since the rent was sought to be collected by Shreepati Builders, the tenants under Kiran Shukla, Amrutlal Tated and others approached the Repair Board and the Repair Board by its letter dated 16th April, 2001 informed them that the ownership of the property was with MHADA and they need not pay rent to anybody else. It was stated in Repair Board's letter dated 16th April, 2001 as follows :

"In this connection, you are informed that the owner of the captioned property is MHADA and hence you are hereby requested to pay the rent of your premises to the office of Estate Manger (TC), whose office is situated at 2nd floor, Griha Nirman Bhavan, Bandra (E), Mumbai-51, henceforth."

33. Therefore these Kiran Shukla & others have challenged the N.O.C. issued on 27th February, 2001 by submitting that no procedure was followed while issuing the N.O.C. to Shreepati Builders. That this being a land acquired by the State Government under section 41, it can only be developed by the State Government, but even if the MHADA or Repair Board want to give it to others, it can only be done by inviting tenders. The proposed scheme will lead to huge profits to Shreepati Builders. Besides, it is pointed out that the N.O.C. was totally vague with respect to F.S.I. and there was a contradiction between Clauses 1 (read with the opening paragraph) and 14 of the N.O.C. with respect to F.S.I. and it was not clear whether the F.S.I. was 2.5 or 4 and whether it was joint venture or otherwise. Therefore, it is sought in this petition that the N.O.C. be set aside the State Government, Repair Board and MHADA be directed to reconstruct the building. They also sought an injunction restraining the builder from acting on the N.O.C. dated 27th February, 2001. Mr. Vashi has given their calculations with respect to the profit margin. He has taken the selling rate of Rs. 6000/- per sq. feet. According to him, the calculations with respect to the area given by Shreepati Builders are not correct and as per his calculations at the rate of F.S.I. 4, the profit would be in the range of Rs. 40 crores. This petition makes a grievance about the tenants being kept in dark and not being informed about various facets of the project. In the letter of 27th March, 2001 referred to above, various such queries are raised.

Chamber Summons by Mangesh Mohite and others to join and reply thereto

34. Mangesh Mohite and others took out a chamber summons to join in Writ Petition No. 1288 of 2001 as referred earlier. In the affidavit in reply dated 3rd July, 2001 to that chamber summons, it is stated by Kiran Shukla in para 4(f) that the said scheme was not in the interest of the tenants. In sub-para (iv) of this para it is stated that under the scheme of Shreepati Builders the old tenants occupying 2/3rd of the land today will be accommodated in 1/3rd area, whereas the newly in-coming flat purchasers in the Tower will be spread over 2/3rd land. It is stated that the developers intend to have a swimming pool for the flat purchasers and car parking slots for which they will be charged separately, may be Rs. 5 lakhs for one car park. In sub-para (iii) of this affidavit, it is stated that the existing tenants numbering around 307 will be housed in a 20 storeyed Tower and the 23 existing commercial tenants will be housed on the ground floor of the said Tower. The said Tower will have 6 lifts. Tenants will not be able to afford the maintenance of operating 6 lifts plus having 20 storeyed Tower. It is relevant to note that no material with respect to this alleged construction is placed before the Court by the builder or by the Repair Board in rebuttal.

Replies by Repair Board, Builder and Government to Mr. Shukla's petition

35. To this Writ Petition No. 1288 of 2001, four affidavits in reply have been filed by Pradeep Pradyumna Trivedi, Executive Engineer, RU 1 of the Repair Board (respondent No. 4) from time to time. These affidavits are affirmed on 2nd July, 2001, 7th August, 2001, 13th August, 2001 and 10th September, 2001.

36. (a) In para 3 of the affidavit dated 2nd July, 2001, it is stated by Mr. Trivedi that the present case for N.O.C. for redevelopment has been scrutinised on the basis of the instructions contained in the Government's decision of 5th July, 1985 referred to earlier and the irrevocable consent signed by the tenants were verified physically on the site. It is then stated-"the instruction contains that even after acquisition of the property, the same can be allowed to be redeveloped by the society of the owners/occupants, if the actual construction has not been commenced by the Board". Thus, in a way, the Repair Board has relied upon Clause (4) of the Government's decision dated 5th July, 1985. It is material to note what is stated, thereafter in this para.

"I say and submit that since N.O.C. has been granted with 2.5 F.S.I., Schedule III of MHADA Act for the purpose of surrendering surplus area is available. I say that taking into consideration the percentage prescribed in Schedule III, no surplus tenement is available."

Thereafter it is stated-

"I say that at present there are about 274 occupiers whose names are standing on the master list. I say that sufficient tenements are available at Sion and Malawani-Malad for the purpose of accommodating all the persons whose names are appearing on the master list."

(b) Thereafter it is stated in paras 4 and 5 of this affidavit that for the purpose of reconstruction of this property, approximately Rs. 15 crores would be required and almost Rs. 70 lakhs will have to be spent for payment of the Award amount and taxes for the last 12 years and provision for Transit Camp. Thereafter it is stated that this fund can be better utilised for other cessed properties in need of urgent repairs. Therefore it is submitted by the Repair Board that the circumstances in which an affidavit was filed in Writ Petition No. 625 of 1989 (filed by Vinit Builders referred to earlier), and the present circumstances are different and there is a vast change. The affidavit also criticises the 58 tenants who have withdrawn their consent letters. It is stated that they cannot be permitted to approbate reprobate. It is further stated that they were called for discussion on 15th May, 2001 but they did not turn up.

37. In the second affidavit of Mr. Trivedi affirmed on 7th August, 2001, reliance is placed on the earlier Government Guidelines vide their letter of 1st December, 1984, and particularly Clauses (f) and (g) thereof. These guidelines are annexed to this affidavit. As the subject thereof indicates, these guidelines were with respect to the participation in reconstruction of the owners and tenants of old and dilapidated buildings paying cess in the city of Mumbai. Clause (f) thereof provided that if 70% of the tenants were prepared to participate in the scheme, such a scheme be sanctioned. It is therefore stated that Government had issued instructions to MHADA that those landlords and tenants who come forward with such a scheme should be issued appropriate N.O.C. by the Repair Board. There was no requirement of inviting tenders. Revised guidelines were issued on 10th January, 1989 in this behalf under section 154(1) of the Maharashtra Regional and Town Planning Act, 1966 and they were deemed to be a part of Development Control Rules for Greater Bombay. These Regulations were to be given immediate effect by the Municipal Corporation in respect of such reconstruction schemes as have been approved under the MHAD Act. Thereafter it is stated in para 4 of this affidavit that 92% of the tenants formed Pimpalwadi Bhadekaru Sangh and gave their consent in favour of Chaturvedi and others and have applied to the Repair Board for granting N.O.C. in accordance with the amended Development Control Rule 33(7). Then it is stated that though the application was under D.C. Rule 33(7), the case was scrutinised in accordance with the directions given by the Government in letter dated 5th July, 1985. Thereafter it is stated-

"I say that taking into consideration the spirit of the guidelines issued by the Government in the letter dated 1-12-84, since in the present case more than 70% of the occupants have given written consent to Shri R.R. Chaturvedi & others, their application was considered by this respondent for the purpose of granting no objection certificate."

This affidavit thereafter states that never in the history tenders were called for redevelopment of cessed property by way of issuing N.O.C. Earlier in 7 cases, N.O.C. was issued by the Board where the property was acquired. In those cases, the tenants and landlords had approached directly the Government for N.O.C. and after receiving the report from MHADA, N.O.C. was issued as directed by Government. It is then stated that in the guidelines of 5th July, 1985, there was no requirement of obtaining prior approval of the Government and hence in the present case also no approval was sought before granting N.O.C. Thus it is suggested that just as the Government could give N.O.C. in the other 7 cases where the property was acquired, the Repair Board could also give it on its own without prior approval of the Government. Lastly, it is stated in this affidavit that joint venture with F.S.I. 4 was under consideration of the Government for last 7 months and in the meanwhile the case was considered as per the Government decision of 5th July, 1985 and N.O.C. was granted as per revised D.C.R. 33(7). To this affidavit, the N.O.Cs., granted by the State Government in 7 cases, as referred to above, are annexed as also the Booklet containing guidelines for the landlords/tenants issued in May 1999 by the Repair Board and the Government's decision of 1st December, 1984, 10th January, 1989 and 23rd January, 1989.

38. In the third affidavit affirmed on 13th August, 2001, Mr. Trivedi has placed on record the steps taken to acquire this land. It is pointed out that the objections were invited under section 41(1) of the MHAD Act by notification of 25th February, 1988 in connection of Prime Minister's Grant Project and the final notification was issued on 3rd December, 1988, that the Collector took possession of the land on 31st October, 1989 and handed it over along with the structures to the respondent No. 2 MHADA on 31st January, 1989. As the scheme could not be materialised under the Prime Minister's Grant Project, the property came to be transferred from Prime Minister's Grant Project to the Repair Board. Thus the land vests in the State Government under section 41(3). In the record of rights, the name of respondent No. 2 MHADA was shown as the owners.

39. In the fourth affidavit of Mr. Trivedi affirmed on 10th September, 2001, the steps taken from 1993 onwards for re-development of this property have been placed on record. It points out that quotations were invited in August 1994 for soil investigation work. Initially by July 1995, M/s. Shashi Prabhu and Associates were appointed as Architects to process reconstruction scheme. In July 1996, Shri Gurunath Dalvi was appointed as Architect in their place. Thereafter the plans for 225 sq. ft. minimum carpet area as prepared by Shri Gurunath Dalvi were approved by Municipal Corporation on 13th January, 1999. Notice to vacate was issued on 22nd March, 1999 to the tenants of old building No. 5 as it was consisting of only 8 tenements. On 9th April, 1999 trial bores were taken. On 19th April, 1999, V.J.T.I. suggested open foundation. On 16th November, 1999, estimates for technical sanction were prepared and on 20th January, 2000 decision was taken to float tenders for appointment of contractors to construct one building to accommodate 64 tenements on the plot of chawl No. 5. On 16th February, 2000 tender notice was published. On 24th May, 2000 offer of one M/s. Jai Construction Co. was received and the same was finalised after negotiations, but work order was not issued. In the meanwhile, Pimpalwadi Bhadekaru Sangh approached the Court, on 31st March, 2000 by filing a suit and thereafter subsequent to the orders in Appeal from Order No. 522 of 2001, N.O.C. was issued to Shreepati Builders on 27th February, 2001, Lastly, it is stated in their affidavit-

"These respondents after considering all the aspects of the matter have granted the said N.O.C. and have intimated to the Government of Maharashtra about the same and have requested the Government to take further steps. The said N.O.C. has been granted as per the guidelines issued by the Government of Maharashtra in the letters of 1984 and 5-7-1985."

40. Shri R.R. Chaturvedi of Shreepati Builders has affirmed an affidavit on 1st August, 2001 in which he has stated that they have spent almost Rs. 2,10,13,340/- on this property. Out of this amount, Rs 70 lakhs are supposed to be paid to M/s. Vinit Builders to purchase their rights, Rs. 36,96,000/- to the Repair Board for obtaining N.O.C. and on actual construction of the Transit Camp, the amount spent is Rs. 18,94,000/-, and the administrative expenses are supposed to be Rs. 22,50,000/-. Lastly it is stated in para 12 of this affidavit that though Shreepati Builders were negotiating with the Government for joint venture with F.S.I. 4 and lot of efforts and expenses were put in this regard, but the Government desired to come out with a proper policy. In the meanwhile, admittedly the plans are sanctioned as of today with F.S.I. 2.5 as permitted under D.C.R. 33(7).

41. As far as the State Government is concerned, as pointed out earlier, while dealing with Writ Petition No. 1366 of 2001 in his affidavit affirmed on 10th September, 2001, Mr. Vyas of the State Government has dealt with the affidavit of Mr. Trivedi and the affidavit of Mr. Vyas has been referred to earlier.

Rejoinders and other affidavits.

42. Mr. Kiran Shukla, the petitioner in this writ petition, has filed a rejoinder on 14th August, 2001 and has again repeated that guidelines of 1st December 1984 are meant for cessed buildings and they are not applicable to acquired properties like the present one. Thereafter he has pointed out when the earlier writ petition was decided by the Division Bench in the year 1994, the guidelines of 1984 were very much in existence and still MHADA had shown desire and willingness to develop the property of their own. Thereafter he has stated that although Shreepati Builders have applied for N.O.C. claiming to be the landlords, they can at best be categories only as contractors appointed by the proposed society and no tenders were invited in the present case for selecting any contractor. This is on the background that earlier as recently as in February 2000, a tender was floated by the Repair Board for one building of 64 tenements on this very property. Thereafter Mr. Shukla has denied that 92% of the tenants have joined the Bhadekaru Sangh. He has in fact disputed that any verification has been carried out or that 70% of the tenants have joined such an application. Thereafter Mr. Shukla has pointed out that all throughout such N.O.Cs., (seven N.O.Cs., on acquired properties as pointed out by the Repair Board itself) were issued on the instructions of the State Government and not directly by MHADA or Repair Board. He has again commented that whereas the impugned N.O.C. states that it is granted under Regulation 33(7), in the affidavit of Trivedi, it is stated that it is under the guidelines of 1984 and 5th July, 1985. Lastly, he has stated that the expenses claimed by Shreepati Builders are exaggerated and, in any case, the money paid to Vinit Builders should not be considered to be their legitimate expenditure for these calculations.

43. The 2nd petitioner-Amrutlal Tated has filed one more affidavit on 17th September, 2001 and has placed on record the photocopies of documents showing as to how steps were being taken by the Repair Board from time to time. Thus he has placed on record the Repair Board's letter of 7th April, 1998 to Architect Shri Gurunath Dalvi asking him to submit plans with 225 sq.ft. minimum carpet area; the Repair Board's letter of 2nd July, 1998 forwarding these plans to the Deputy Chief Engineer, in-charge of Building Proposals of Municipal Corporations then the corporation's letter of 13th January, 1999 approving the plans; the Repair Board's correspondence with Mr. Davli and finally Mr. Dalvi's protest letter dated 27th February, 2001 on terminating his services with respect to the Pimpalwadi Scheme.

Affidavits of a few tenants and Chamber Summons No. 171 of 2001 by D.R. Jadhav.

44. Some of the tenants have also filed their affidavits. Thus, for example, three tenants Shankar Bane, Nalin Pandya and Malti Shelar have filed an affidavit affirmed on 3rd July, 2001 that they were supporting Shreepati Builders. Similar affidavit is filed by Hareshwar Tandel. As against that, one Dattatraya Jadhav has taken out Chamber Summons No. 171 of 2001 stating that he was supporting Kiran Shukla and others on behalf of 41 tenants and he be heard in the matter. These 41 families were earlier staying in Pimpalwadi and in view of the two chawls occupied by them being demolished are staying in the transit camp of MHADA at Borivali since last so many years.

Notices from the files produced by MHADA and Repair Board.

45. Mr. Singhvi, learned Counsel appearing for MHADA and Repair Board, produced the photocopies of the notings from the files of MHADA and Repair Board concerning the development of this property. He offered the inspection of these notings. These notings were sought by the Court with a view to understand as to what transpired at the level of these two Bodies with respect to the issuance of the disputed N.O.C. In his submission, the notings were not relevant for the purposes of examining the validity of the decision of these bodies. However, he produced them in deference to the suggestion from the Court. When we see these notings, we find that some of the objections raised by Kiran Shukla and others are very much reflected in them at the level of the officers dealing with this matter. Some of the relevant notings are referred to below. Thus a detailed note is made by the concerned engineers of the Repair and Reconstruction Board on 27th November, 2000 in view of the application of M/s. Purohit & Associates dated 17th October, 2000 submitting their redevelopment proposals as per the provisions of revised D.C.R. 33(7). The note starts at file page No. 25/N and records that the captioned property was in possession of the Board after its acquisition and the reconstruction scheme was at the stage of tenders and was being processed by the office of Deputy Chief Engineer (Reconstruction). It further records that the tenants had moved the City Civil Court and were opposed to the property being developed by the Repair Board. Thereafter the note records:-

"The Board has got approved the amended plans having carpet area of individual tenement of 225 sq. ft. from M.C.G.M. on 13-1-99 according to which Board will get a surplus of 133 residential t/s. however to implement this scheme the Board requires a huge amount of Rs. 12 crores."

Thereafter the note mentions that on the proposal of M/s. Purohit & Associates, the Deputy Chief Engineer (Reconstruction) has opined to consider the following issues:-

"(i) The Hon. Court has dismissed the W.P. of previous owners M/s. Vinit Builders and therefore LA/A will have to examine whether MHADA can change its stand taken earlier.

(ii) The Board will get 133 surplus T/s if redeveloped by Board, whereas there won't be any surplus t/s if given to developer and thus entire labour of 15 years done by MHADA will be in vain.

(iii) This is the scheme which has capacity to accommodate additional 133 No. of t/s.

(iv) In one of the PIL filed against MHADA, list of schemes have been submitted to Hon. High Court; it was assured to High Court that these schemes will be taken up in next 5 years by MHADA.

(v) The group of tenants staying in T.C. is representing to develop the said property through MHADA.

In view of the above, he DYCE (R) has arrived at a conclusion that Board should take reconstitution of the said property as it will yield 133 surplus t/s."

The note further states-

"In view of the above, it is felt that we may ask the LA/A to move the matter in the Hon. Court to get the order modified from the Hon. High Court if Board desire to allow for redevelopment by the Bhadekaru Sangh through private builder."

Then there is a noting made at the bottom of this lengthy note that the Chief Officer had instructed the developer if he would be willing to enter a Joint Venture with 4 F.S.I. and then there is a reference to a letter dated 5th December, 2000 from Shreepati Builders conveying their willingness for the same. The note further states that the Chief Officer has communicated to the Developer that MHADA will be willing to enter into a joint venture subject to Government's final sanction. The note thereafter records that the tenants have recommended one Shri L.D. Shah as an Architect (by a letter from Shreepati Builders dated 19th January, 2001) and therefore there is a further note that the services of Shri Gurunath Dalvi, who was the earlier Architect, will have to be terminated.

46. Thereafter we have a noting on D.O. letter dated 10th February, 2001 addressed to Shri Uttam Khobragade, Vice President and Chief Executive Officer of respondent No. 2 MHADA by Shri Ravi Budhiraja, Secretary, Housing and Special Assistance Department of Government of Maharashtra. The letter reads as follows :-

"Ravi B. Budhiraja 10-2-2001 Secretary

Dear Shri Khobragade,

I have received an invitation for the Bhoomi Pujan ceremony to be held today for "Shreepati Towers" at Pimpalwadi by way of a Joint Venture with the MHADA. Please let me know on what terms and conditions this Joint Venture was agreed to by MHADA and the level at which approval was accorded. A letter has separately been issued to MHADA yesterday conveying Cabinet's approval in principle to the Joint Ventures proposed in the Cabinet note. Letter also mentions that the F.S.I. over 2.5 would only be available to MHADA for a public purpose and not for sharing with private developers. You are requested to examine the legal position before finalising any such venture and keep me informed.

We will be separately issuing guidelines for finalising such Joint Ventures, for guidance.

With regards.

Yours sincerely,

Sd/-

(Ravi B. Budhiraja)"

It is stated in the note that a reply was sent on 14th February, 2001 to this letter informing that no agreement of Joint Venture has been executed so far. Thereafter we have a reference to the letter of 15th February, 2001 sent by Shreepati Builders to the Chief Officer of the Repair Board stating that Government was examining the scheme with a vide spectrum and Government's written consent would be delayed. Monsoon was round the corner and therefore prior to that foundation work should be executed provided the work is started within 10-15 days. Thereafter it is stated as follows :

"Considering above and in case Government's written consent is likely to be delayed in that event, we humbly request you to grant us N.O.C. permitting the re-development scheme with F.S.I. 2.5 with the condition that on having Government's written consent for the joint venture scheme with F.S.I. 4 as per D.C.R. 33(9) with all benefits extended therein of revised D.C.R. 33(10), 35(2) K and 35(2) C; our Pimpalwadi proposal will also be included in the Joint Venture Scheme.

We will make foundation and building design to utilise F.S.I. upto 4.00 with norms of earthquake analysis and the seismic forces so that at the time of amendments of scheme from F.S.I. 2.5 to F.S.I. 4 above stated provisions will be helpful."

47. This note thereafter records that as per the tenantable area calculations with 2.5 F.S.I. the percentage of surplus area comes to 35.13% and therefore no surplus area as per 3rd Schedule of MHADA Act is required to be surrendered to the Board. However, the exact surplus will be arrived at when the plans will be approved by the Municipal Corporation with 2.5. F.S.I. The note further records that Government's approval to release this property in favour of the tenants' proposed society will have to be obtained. Not only that but the note further states-

"However since the Government's approval to the captioned property with 2.5 F.S.I. is not yet sought, we may refer the case to the kind perusal of Hon. Vice President & Chief Executive Officer of the Authority."

Thereafter there is a letter from the Chief Officer of the Repair Board Smt. Vandana Khular addressed to the Vice President dated 26th February, 2001. The letter points out that the Joint Venture Policy with 4 F.S.I. has not yet been approved by the Government. Shreepati Builders had requested for N.O.C. with 2.5 F.S.I. It further states that this is an acquired property by the Board and it had reached the stage of starting construction. Yet the letter states that they may grant N.O.C. with 2.5 F.S.I. subject to two conditions, viz. (1) Government approving cancellation of acquisition and (2) Administrative costs of Rs. 30 lakhs maybe recovered from the Board. Accordingly, the submission was made to the Vice-President for his orders and the Vice President had signed in approval. Thus it appears that thereafter the N.O.C. in dispute has come to be issued on 27th February 2001.

48. Thereafter in the notings dated 7th April, 2001 starting from pages 45-N, there is a reference to the Government's letter dated 9th February, 2001 and the note states that as per the letter, the profit accrued with the excess F.S.I. of 1.5 shall entirely be utilised for public benefits. Then it states- "Thus the Joint Venture of the captioned property cannot be processed further". The note however states that in the meanwhile the N.O.C. with 2.5 F.S.I. had already been given to Shri R.R. Chaturvedi on 27th February, 2001 Then in a note dated 8th April, 2001 addressed to the Chief Officer of MHADA, the Chief Officer of the Repair Board has mentioned that the Secretary (Housing) spoke to her on 7th April, 2001 and had expressed it to her that once a property was acquired by MHADA for reconstruction it could not should not be de-acquired even for giving N.O.C. with 2.5 F.S.I., instead either the Board should reconstruct or it should invite bid from developers for redevelopment. The Chief Officer of the Repair Board had therefore submitted that the N.O.C. may not be processed further. It is material to note that immediately thereafter, i.e. on 18th April, 2001, Writ Petition No. 1366 of 2001 was moved and an ad interim injunction was granted by the Division Bench as pointed out earlier.

49. Thereafter there is a further noting on page 53/N which records amongst others that there was a message from the P.A. to the Hon'ble Chief Minister for cancelling the N.O.C. However, the note records that according to the Vice-President and the Chief Executive Officer of MHADA, the N.O.C. was perfectly legal and apart therefrom there was an injunction granted in Writ Petition (Lodging) No. 976 of 2001 filed by Mangesh Mohite and others restraining cancellation of the N.O.C.

50. Thereafter there is a typed note dated 26th April, 2001 by the Vice President on the question whether the letter to the Municipal Corporation for processing the proposal can be issued or not. The note states that the action of the Board should be strictly as per the legal provisions and should not be guided by extraneous consideration like this action will result into profit of some individual or we do not like somebody's face. The note records that if there is some sort of understanding between the tenants and the landlord, the Government should support such reconciliation and should not do anything to engineer a conflict between these two groups. The note further states that some 335 families were concerned in the matter and they were staying in inhuman condition for the last 12 years. It further states that MHADA could not redevelop these chawls due to resistance of the tenants and will not be able to redevelop the same for 20 more years. The note states that as this property is included in Government directives of 5th July 1985, there is no need of derequisition. Finally, therefore it is stated that it is necessary to inform the corporation that the proposal be processed as per the request of society of tenants to whom this land will be subsequently conveyed.

51. Written submissions were tendered on behalf of all the parties and oral arguments were also advanced by their Counsel. We will first refer to the submissions advanced by Mangesh Mohite and others and by the Developer and MHADA in their support and thereafter those by Kiran Shukla & others and the State Government in reply. However, before we refer to these submissions, it would be relevant to reproduce some of the relevant provisions referred to by all the Counsel.

The relevant provisions

52. Some of the sections which are relevant for our purpose are following:

(A) Maharashtra Housing and Area Development Act, 1976, Chapter III- Functions, duties and powers of the Authority and Board

"28. Functions, duties and powers of Authority.-

(1) .........

(2) .........

(3) The Authority may exercise all or any of the following powers for the purpose of discharging its function and performing its duties under this Act, namely:-

(i) to borrow;

(ii) to enter into agreements and contracts;

(iii) to sell, purchase, lease, mortgage, exchange, partition or otherwise transfer any land or building or to hold land entrusted to it by Government or by any authority."

Chapter V- Acquisition of Land and Disposal of Property of the Authority

"41. Power of State Government to acquire land.---(1) Where, on any representation from the authority or any Board it appears to the State Government that, in order to enable the authority to discharge any of its functions or to exercise any of its powers or to carry out any of its proposals plans, or project, it is necessary that any land should be acquired, the State Government may acquire the land by publishing in the Official Gazette, a notification to the effect that the State Government has decided to acquire the land in pursuance of this section :-

Provided that, before publishing such notification, the State Government shall by notice published in the Official Gazette, and served in the prescribed manner, call upon the owner of, or any other person who, in the opinion of that Government, may be interested in, such land to show cause, why it should not be acquired and after considering the cause, if any, shown by the owner or any other person interested in the land the State Government may pass such orders as it thinks fit.

Provided further that .........

(2) The acquisition of land for any purpose mentioned in sub-section (1) shall be deemed to be a public purpose.

(3) Where notification aforesaid is publishing in the Official Gazette, the land shall, on and from the date on which the notification is so published, vest absolutely in the State Government free from all encumbrances."

"42. Power of State Government to require person in possession of land to surrender or deliver possession thereof to State Government.---(1) Subject to the provisions of section 51, where any land is vested in the State Government under sub-section (3) of section 41, the State Government may, by notice in writing, order any person who may be in possession of the land to surrender or deliver possession thereof to the State Government or any person duly authorised by it in this behalf within thirty days of the date of service of the notice.

(2) If any person fails or refuses to comply with an order under sub-section (1) the State Government may take possession of the land, and may, for that purpose use or cause to be used such force as may be reasonably necessary.

(3) Where any land is taken possession of as aforesaid, the State Government shall make that land available to the authority for the purpose for which the land has been acquired and for discharging its functions, performing its duties and exercising its powers."

"64. Power to dispose of property.---Subject to any Rules made by the State Government under this Act, the authority may retain, lease, sell, exchange or other wise dispose of, any land, and building or other property vesting in it and situate in the area comprised in any proposal, plan or project permitted under this Act, in such manner as it thinks fit."

Chapter VIII- Repairs and Reconstruction of dilapidated buildings

"83. Exemption of certain buildings and lands from payment of cess.---(1) The following lands and buildings shall be exempt from payment of the cess, that is to say,-

(a) lands and buildings vesting in, or leased to, the Central Government;

(b) lands, and building vesting in, or leased to the State Government or requisitioned by the State Government, but not those lands and buildings where the land vesting in or leased to the State Government is given on lease and the building erected thereon belongs to any other person, and also not those lands and buildings where the land and building thereon vesting in or leased to the State Government are given on lease to any other person.

(c) ......................

(d) ......................."

"92. Submission of proposal for acquisition.---(1) If in respect of any building the Board has issued a certificate under sub-section (3) of section 88, or the Municipal Commissioner has under section 354 of the Corporation Act, issued a written notice requiring the owner or occupier thereof to pull down the building, with a view to preventing all cause of danger therefrom, and the Board is of the opinion that such building is not capable of being repaired or rendered fit for habitation at reasonable expense and is dangerous or injurious to the health or safety of the inhabitants thereof or, where the Bombay Corporation has under section 354-R of the Corporation Act passed a resolution declaring the area in which any such building is situated as the clearance area, the Board may submit to the State Government a proposal to acquire the land, including a proposal for issue of a clearance and compulsory acquisition order to clear and acquire the land with the existing building in whatever condition thereon and for constructing a new building on the same site, and simultaneously prepare plans and estimates for these purposes.

(2) .........

(5) .........."

"93. Clearance and compulsory acquisition.---(1) Notwithstanding anything contained in the Corporation Act, if on receipt of an acquisition proposal under section 92, the State Government is satisfied about the reasonableness of the proposal and of the resources available with the Board for constructing a new building, it may approve the proposal and communicate its approval to the Board.

(2) ............

(11) ......."

"95-A. Summary eviction of occupiers in certain cases.---(1) Where the owner of a building or the members of the proposed co-operative housing society of the occupiers of the said building, submits a proposal to the Board for reconstruction of the building, after obtaining the written consent of not less than 70 per cent of the total occupiers of that building and a No Objection Certificate for such reconstruction of the building is issued by the Board, to the owner or to the proposed co-operative housing society of the occupiers, as the case may be, then it shall be binding on all the occupiers to vacate the premises.

Provided that, it shall be incumbent upon he holder of such No Objection Certificate to make available to all the occupants of such building alternate temporary accommodation.

(2) On refusal by any of the occupant to vacate the premises as provided in sub-section (1), on being approached by the holder of such No Objection Certificate for eviction of such occupiers, it would be competent for the Board, notwithstanding anything contained in Chapters VI and VII of this Act, to effect summary eviction of such occupiers.

(3) Any person occupying any premises, land, building or structure of the Board unauthorisedly or without specific written permission of the Board in this behalf shall, notwithstanding anything contained in Chapters VI and VII of this Act, be liable for summary eviction.

(4) Any person who refuses to vacate such premises or obstructs such eviction shall, on conviction, be punishable with imprisonment for a term which may extend to one year or with fine which may extend to five thousand rupees, or with both."

Chapter VIII-A Acquisition of cessed properties for co-operative societies of occupiers

"103-B. Acquisition of cessed property for co-operative societies of occupiers.---(1) Notwithstanding anything contained in any of the provisions of Chapter VIII or any other law for the time being in force or in any agreement, contracts, judgments, decree or order of any Court or Tribunal to the contrary, a co-operative society formed or proposed to be formed under the provisions of the Maharashtra Co-operative Societies Act, 1960 by not less than seventy per cent of the occupiers in a cessed building may by written application request the Board to move the State Government to acquire the land together with the existing building thereon or where the owner of the building does not own the land underneath or appurtenant to such building but holds it as a lessee or licensee, or where any person holds the building or the land underneath or appurtenant to such building or both under a lease or licence, then to acquire the right or interest of such owner or person in or over such building or land or both as lessee or licensee together with the existing building thereon (hereinafter in this Chapter referred to as "the land"), in the interest of its better preservation or for reconstruction of a new building in lieu of the old one and intimate their willingness to pay the amount of such acquisition as may be determined under the provisions of this Chapter and to carry out the necessary structural and other repairs, or wherever necessary, to reconstruct a new building, as the case may be, at their own cost."

Explanation.--- (1) ....................

.......................

(7) ...................

Chapter XI-Control

"164. Power of State Government to give directions and instructions and to suspend resolution and orders.---(1) The State Government may from time to time issue such directions or instructions as it may think fit in regard to finances and conduct of business and affairs of the authority or any Board and the authority and such Board shall be bound to follow and act upon these directions or instructions.

(2)(a) Without prejudice to the generality of the foregoing provision, if the State Government is of opinion that the execution of any resolution or order of the authority or of any Board is in contravention of, or in excess of, the powers conferred by or under this Act or any other law for the time being in force, or is likely to lead to abuse or misuse of or to cause waste of the Fund of the authority, the State Government may, in the public interest, by order in writing, suspend the execution of such resolution or order. A copy of such order shall be sent forthwith by the State Government to the authority and its Chief Executive Officer and the Board concerned and its Chief Officer.

(b) On receipt of the order sent as aforesaid, the authority, or the Board, as the case may be, shall be bound to follow and act upon such order."

"165. Power of State Government to order inquiries.---(1) The State Government may, with a view to satisfying itself that the powers and the duties of the authority or any of its Boards are being exercised and performed properly, at any time, appoint any person or persons to make inquiries into all or any of the activities of the authority or the Boards, as the case may be, and to report to the State Government the result of such inquiries.

(2) The authority or the Board shall give to the person or persons so appointed all facilities for the proper conduct of the inquiries and shall produce before such person or persons any document, account or information in the possession of the authority or he Board, which such person or persons demand for the purposes of the inquiries."

(B) Development Control Regulations for Greater Bombay, 1991 as amended by State Government Gazette dated 25th January, 1999.

"33. Additional Floor Space Index which may be allowed to certain categories.---(1) Road widening and construction of new Roads- ...........

(2) Building of Educational and Medical Institutions and Institutional Buildings- ..............

(3) Building of Government and Semi-Government offices and public sector undertakings- ...........

(4) Buildings of Starred Category Residential Hotels- ............

(5) Low cost housing schemes of the Maharashtra Housing and Area Development Authority- .......

(6) Reconstruction of buildings destroyed by fire or which have collapsed or which have been demolished- .......

(7) Reconstruction or redevelopment of cessed buildings in the Island City by Co-operative Housing Societies or of old buildings belonging to the Corporation.- For reconstruction/redevelopment to be undertaken by Co-operative Housing Societies of existing tenants or by Co-operative Housing Societies of Landlords and/or occupiers of a cessed building of "A" category in Island City, which attracts the provisions of MHADA Act, 1976, and for

reconstruction/redevelopment of the buildings of the Corporation constructed prior to 1940, the floor space index shall be 2.5 on the gross plot area or the F.S.I. required for Rehabilitation of existing tenants plus incentive F.S.I. as specified in Appendix III, whichever is more.

Provided however that with the previous approval of the Government, MHADA/Corporation shall be eligible to get additional incentive F.S.I. over otherwise permissible F.S.I. as specified in Annexure III of these Regulations:

Provided further that in cases of composite redevelopment scheme for plot having 'A' category as also 'B' category cessed building the above F.S.I. shall be available.

Provided further that in cases of reconstruction/development of buildings which have been declared as unsafe by the BHAD Board prior to monsoon of 1997, the above F.S.I. will be available irrespective of category of cessed building.

Provided further, that reconstruction/redevelopment undertaken by proposed Co-operative Housing Societies of Landlords and/or Occupiers of cessed building of 'B' category, and where composite development is undertaken by different owners of 5 or more plots the F.S.I. required for rehabilitation of existing tenants plus incentive F.S.I. as specified in Appendix III will be available.

(8) Construction for Housing the Dishoused- .....................

(9) Repair and reconstruction of cessed buildings and Urban Renewal Schemes.- For repairs and reconstruction of cessed buildings and Urban Renewal Schemes undertaken by the Maharashtra Housing and Area Development Authority or the Mumbai Housing and Area Development Board or the Corporation in the Island City, the F.S.I. shall be 4.00 or the F.S.I. required for rehabilitation of existing tenants/occupiers, whichever is more.

(10) Rehabilitation of sham dwellers through

owners/developers/co-operative housing societies- .............

(11) Sites and Services, Small Size Tenement, under the Urban Land (Ceiling and Regulations) Act, 1976- ...............

(12) Development by Maharashtra Housing and Area Development Authority with World Bank Assistance- ..........

(13) Provisions relating to transmit camp tenements for Slum Rehabilitation Scheme- .............

APPENDIX III

(Regulation 33(7))

Regulations for reconstruction or redevelopment of cessed buildings in the Island City by the landlord and/or Co-operative Housing Societies.

(1) .............

(2) .............

(3) ..............

(4) The tenements in the reconstructed buildings shall be allotted by the landlord/occupants' co-operative housing society to the occupiers as per the list certified by the Mumbai Repairs and Reconstruction Board. The prescribed percentage of the surplus built-up area as provided in the Table in the Third Schedule of the Maharashtra Housing and Area Development Act, 1976, shall be made available to the Mumbai Repairs and Reconstruction Board for accommodating the occupants in transit camps or cessed buildings which cannot be reconstructed, on payment of an amount as may be prescribed under MHADA Act, 1976.

.......................

......................

(11) The F.S.I. as in sub-regulation (7) of Regulation 33 should be allowed by the Commissioner only after Mumbai Repairs and Reconstruction Board is satisfied that the said redevelopment proposal fulfils all conditions to be eligible for the benefits under these Regulations."

SUBMISSIONS ON BEHALF OF MANGESH MOHITE AND OTHERS

53. It was submitted of behalf of Mangesh Mohite and others that when it comes to reconstruction or redevelopment of buildings constructed prior to 1940 and which have become old and dilapidated, all that was necessary was that they had to be cessed buildings and 70% of the occupants and the landlords had to come together in a co-operative venture for this reconstruction. Once they arrive at that decision, all that MHADA or the Repair Board had to do was to verify their decision and thereafter the right to develop the property would be exclusively vested in the occupants. It will be for them to choose their own developer and there was no question of inviting any tenders nor was there any role contemplated for MHADA and Repair Board. It was submitted that this is how the Government directives of 1st December, 1984 and 5th July, 1985 will have to be read as also the Development Control Regulation No. 33(7). Alternatively, it was submitted that assuming that this property was acquired by the State Government, even the State Government had to make it available to MHADA and MHADA in turn had to hand it over to such 70% occupants coming together for development of this property.

54. With respect to the first proposition above, it was submitted that the earliest Government directive of 1st December 1984 was one whereunder the Government policy in this behalf was first laid down. The said directive laid down various conditions but it principally provided that 70% of the residents and the landlord of the concerned property ought to agree to such development. It was also laid down that it was not compulsory that the newly constructed tenements ought to be available only on ownership basis. Those who are not ready to take on ownership basis i.e. the tenants numbering the remaining 30% or less who are not ready to join, will be accommodated in the Transit Camp to begin with and subsequently accommodated in the redeveloped property.

55. It was then submitted that the subsequent Government decision of 5th July, 1985 though mentions some 34 properties in its Annexure (one of which is Pimpalwadi), it will have to be construed as applicable not merely to those 34 properties and for which the steps of acquisition etc. were taken till the date of that decision but for all times to come. It was submitted that the said communication contains a policy decision applicable to similar situations which would develop thereafter as well. Emphasis was laid on Clause (4) of this letter of 5th July, 1985 and although this clause deals with sites where land acquisition "has been completed but work of reconstruction has not been started", it was submitted that it would apply to those sites where land acquisition would be initiated thereafter also. This is because as far as Pimpalwadi is concerned, even the proposal for the acquisition of land was initiated much after the issuance of this communication and if the clause is read as it is, the development of Pimpalwadi would not be covered under this decision of 5th July, 1985. It was therefore submitted that this clause lays down a policy for future as well and it provides that where such acquisition takes place and where 70% of the residents of the buildings request for redevelopment of the sites, then it ought to be allowed to be developed through them.

56. It was then submitted that it is this policy itself which is subsequently notified under the Development Control Regulations which were first notified on 14th December, 1989 and which were subsequently finalised into Development Control Regulations of 1991, and amended from time to time. These Development Control Regulations have a statutory force inasmuch as they are framed under section 31 of the Maharashtra Regional and Town Planning Act, 1966 and Regulation 33(7) read with Appendix III thereof lays down the rules for reconstruction or redevelopment of cessed buildings in the Island city by co-operative societies. It was submitted that this Regulation 33(7) read with Appendix III thereto bind the State Government and MHADA and all that the State Government and MHADA or the Repair Board can expect is a percentage of built up area to be reserved for allotment by the Board as provided under 3rd Schedule to the MHAD Act.

57. Mr. Naphade, learned Counsel for Mangesh Mohite & others, submitted that this has been the spirit of the aforesaid Government directives of 1984 and 1985 as also the above referred Development Control Regulations. The idea has been to encourage a co-operative effort and participation of more than 70% of the residents and encourage them to develop the property through a developer of their choice. This having been the policy approach of the State Government, no contrary interpretation can be ascribed only to those properties which are acquired under section 41 of the MHAD Act merely because they were properties acquired by the State Government.

58. Alternatively, as pointed out above, Mr. Naphade submitted that considering this spirit and the approach behind issuance of the above referred directives and the Regulations, even if the earlier canvassed interpretation of D.C. Regulation 33(7) read with Appendix III is not acceptable, then also under section 42(3) of the MHAD Act, it was the duty of the State Government to make available the acquired property to MHADA for development by MHADA and then it was for MHADA to take appropriate decision as to how the property ought to be developed. It was submitted that sections 41 and 42 of the MHAD Act cannot be read in isolation but they have to be read in the light of section 28 and other provisions of the MHAD Act. It was submitted that the phrase "to make that land available" occurring in section 42(3) will mean "to transfer the title in the property" as held by the Apex Court in the context of the phrase "to make over" the water courses in para 16 of the judgment in the case of Municipal Corporation of Greater Mumbai v. Hindustan Petroleum, .

59. Mr. Naphade submitted that the phrase "to hold land entrusted to it by Government" occurring in section 28(3)(iii) of the MHAD Act, which lays down the functions, duties and powers of the Authority and Board implies a habendum clause normally used in a conveyancing. He submitted that section 28(3)(iii) read with section 42(3) of the MHAD Act operates as a statutory conveyance of the property acquired under section 41 of the MHAD Act in favour of MHAD and therefore the land vests in MHADA. In this behalf, he further relied upon the judgment of the Apex Court in the case of K.K. Handique v. Member of Board of Agricultural Income Tax, Assam, of the

judgment, the Apex Court held that the expression "holds" includes a two fold idea of the actual possession of "the thing and also of being invested with a legal title". To similar effect is the judgment of Nagpur High Court in the case of Manohar Ramkrishna v. D.G. Desai, reported in A.I.R. 1951 Nagpur 33 which held in para 11 that the word "hold" has several meanings, one of which is no doubt "possess" but then it also means "be the owner of (property)".

60. Mr. Naphade then submitted that the words used in section 28(3) of the Act are of wide import and therefore transfer of development rights is certainly within the compass of the said provision. MHADA is therefore entitled to give development rights to the occupants. He submitted that it was not necessary for MHADA to obtain the consent or permission of the Government to implement the scheme under D.C. Regulation 33(7). In his submission, that was not provided under any law or guidelines. In his submission, the exercise of the administrative powers under section 164, which the State Government enjoys over MHADA, cannot defeat or take away the rights of the occupants under D.C. Regulation 33(7). He submitted that in any case in other cases where the properties were acquired either under section 41 or section 93 of the MHAD Act, the Government had permitted private developers to develop those properties. That being the position, Government cannot unreasonably withhold the consent in the present matter. This is assuming without accepting that any such consent or permission of the Government was required. Mr. Naphade submitted that the grant of N.O.Cs., in other cases where the property was acquired under section 41 was also an indication of the fact that D.C. Regulation 33(7) would apply to acquired properties also. He submitted that it was also not permissible to canvass that merely because the property was acquired and it was exempt from payment of cess under section 83 of the MHAD Act, the D.C. Regulation 33(7) would not apply. He submitted that what applies to D.C. Regulation 33(7) would apply to D.C. Regulation 33(9) also and the interpretation canvassed by the Government would lead to denial of equal rights to the occupants of such buildings merely because the property is acquired. He submitted that it is the character of the property prior to acquisition which is relevant for the purposes prior to acquisition which is relevant for the purposes of D.C. Regulation 33(7), and D.C. Regulation 33(9). Exemption from payment of cess under section 83 of the MHAD Act is one thing and the building being cessed is another. In his submission, a property acquired would not cease to be a cessed property and D.C. Regulation 33(7) would continue to apply to the properties acquired under section 41 of the MHAD Act. With respect to the judgment of the Division Bench in Writ Petition No. 1288 of 2001, Mr. Naphade submitted that it only meant that the challenge to the State acquisition by the owner was repelled by the High Court. The statement made by MHADA during the course of that hearing on affidavit to the effect that MHADA is developing the property cannot be read as a part of the order of the Court and it cannot be contended that the High Court has directed that the property be developed by MHADA only. Mr. Naphade submitted that similarly the order to the order of a Single Judge in A.O. (Stamp) No. 522 of 2001 and the consent terms therein would only mean that the consent of the Government is required if construction at F.S.I. 4 was to be approved. He submitted that as far as 2.5 F.S.I. is concerned, there was no Joint Venture contemplated for that and therefore construction upto 2.5 F.S.I. did not require approval of the State Government. He lastly submitted that in similar cases, the Government has permitted the occupants to choose their own developers. Mangesh Mohite and others representing more than 70% of the occupants therefore had legitimate expectation that Government will grant permission in the present case also.

ARGUMENTS ON BEHALF OF SHREEPATI BUILDERS:

61. Mr. Reis appeared for Shreepati Builders and the developers belonging to this group who have been joined as respondents. He submitted firstly that the N.O.C. issued by the MHADA and the Repair Board was for development of the property at 2.5 F.S.I. and not joint venture with 4 F.S.I. He further submitted that the property was purchased by Shreepati Builders from Vinit Builders only with a view to extinguish rights of Vinit Builders, if any. It was not the case of the Shreepati Builders that they had approached for the development of the property in their rights as owners of the property by virtue of this purchase. They were claiming rights only under the N.O.C. which were given by MHADA after verification of the strength of the occupants, namely, that it was more than 70%. Mr. Reis submitted that the irrevocable consent given by the tenants was for the development under D.C.R. 33(7) for 2.5 F.S.I. Kiran Shukla and others were trying to withdraw from this consent at the instance of some politicians. This cannot be permitted because in any project of such magnitude there has go to be consistency on the part of its members. He disputed the bona fides of Kiran Shukla and others and stated that they were trying to exert pressure on Shreepati Builders to grant them more area than what was permissible under D.C.R. 33(7). He submitted that negotiations were already held with the tenants. There was no question of further negotiations.

62. Similarly he submitted that there were no question of any tenders being invited and the property had to be developed by a developer of the choice of more than 70% of the tenants. In the past also no tenders were invited under D.C.R. 33(7). He further submitted that Shreepati Builders were invited by the occupants and it is because of their persuasion that the Builders and approached Vinit Builders and were subsequently collecting the rent and had taken various steps such as making the payment to the Housing Board, to the Municipal Corporation for getting plans sanctioned and setting up of a transit building. For that purpose considerable amount to the tune of nearly Rs. 2 crores had been spent. Respondent Nos. 1 and 2 were, therefore, estopped by doctrine of promissory estoppel from denying rights accured in favour of the Shreepati Builders to complete the project as per the said N.O.C. He submitted that the Shreepati Builders had also the legitimate expectation and respondents Nos. 1 and 2 are estopped from denying those rights on the basis of the principle of promissory estoppel. With respect to the controversy between the State Government and MHADA. Mr. Reis submitted that the ultimate authority to grant N.O.C. was that of MHADA and in all the other cases relied upon by the Government although there were recommendations of the State Government, the N.O.C. was given by MHADA. In his submission large projects like the present one would not be developed by MHADA inasmuch as considerable finance expertise and co-operation of the occupants was required which could not be assured by MHADA. All these years MHADA had failed to do anything in that behalf. The Government decisions of 1st February, 1984 and 5th July, 1985 were general in character and were meant for all times and the present N.O.C. was protected under the Government guidelines of 5th July, 1985 and D.C.R. 33(7). He further submitted that merely because the property was acquired, it cannot be said that it ceased to be a cessed building and that would be an incorrect and dangerous proposition. It had been submitted on behalf of Kiran Shukla and others that out of the 1,50,000 sq.ft. of F.S.I., 90,000 sq.ft. F.S.I. would be required for rehabilitating the tenants and the remaining 55,000 would be left to the developer. The submission of Mr. Reis was that, that much area was the minimum requirement for N.O.C. holder for entering into a project of such magnitude. With respect to the requirement of accommodating 133 more tenants, he submitted that there was sufficient accommodation available in the transit camps of MHADA. Besides in a scheme developed by MHADA, the occupants would continue to remain as tenants whereas in a scheme under D.C.R. 33(7), they would become owners of the property. He, therefore, submitted that the issuance of N.O.C. and the steps taken on that basis were justified in the facts of the present case.

SUBMISSION ON BEHALF OF THE MHADA AND REPAIR BOARD:

63. Mr. Singhavi, learned Counsel appearing on behalf of the MHADA, submitted that although the property was acquired under section 41(1) of the MHAD Act, the agency to act on behalf of the State Government was MHADA. Under section 41(3) of the MHAD Act, it vests absolutely in the State Government and under section 42(3), the State Government was duty bound to make the land available to MHADA. Accordingly, it had been made available and in the property card it was the name of MHADA which had been entered into as the owner. He submitted that the phrase "to make the land available" meant to offer it to take advantage or benefit thereof as per the Webster Dictionary. MHADA was entitled to develop it by itself or through the occupants in accordance with the scheme approved by the Government and that was being done by following the Government guidelines in the decision of 1984 and particularly Clause 4 of the decision of 5th July, 1985 read with D.C.R. 33(7). MHADA and Repair Board had faced an opposition from the tenants and there was a problem of funds. The chawls were in need of urgent repairs and good number of these occupants were languishing in transit camp. It is, therefore, that the decision had been taken and there was no provision under the Act to obtain prior approval of the Government before issuing any such N.O.C. He submitted that in accordance with this N.O.C., a licence was issued in favour of Shreepati Builders as promoters of the society and they were given possession thereof. Plans were submitted to the Municipal Corporation and it had also issued the I.O.D. (Intimation of Disapproval i.e. permission on certain terms) on 24th May, 2001. The promoters had paid an amount of Rs. 30 lacs towards the acquisition cost, administrative cost, and rent of Rs. 6,91,200/- and had constructed a temporary transit building. MHADA, therefore, could not go back from its N.O.C. The oral instructions given by the State Government on 12th April, 2002 not to act in accordance therewith were neither legal nor justified.

64. Mr. Singhavi then submitted that the fact that certain buildings are exempted from payment of cess by the Board does not take them out of the category of cessed building. Clause 3 of Appendix-III of D.C.R. 33(7) mentions old cessed building. It will have to be read as applicable to buildings which were liable to be cessed before acquisition. Mr. Singhavi, therefore, submitted that the property will have to be construed as under MHADA and not under the State Government. He further submitted that even under sections 93 and 103-B of the MHAD Act, the acquired property gets vested in MHADA and to them D.C.R. 33(7) does apply. He, therefore, criticised the Government's argument that it had acquired property and, therefore, it was no longer a cessed property and, therefore, D.C.R. 33(7) will not apply as an untenable proposition.

65. With respect to the internal notings of MHADA, he submitted that they cannot be relied upon and they were privileged documents. He relied upon para-12 of the judgment of the Apex Court in the case of State of Bihar v. Kripalu Shankar, , in

this behalf. He further submitted that the internal notings are meant for a fearless and independent expression of opinion by the officers and they cannot be commented adversely. Ultimately, it is the final decision of the highest authority which is relevant. However, the notings cannot be used to contradict or to oppose the final decision arrived at by MHADA. In the circumstances, Mr. Singhavi supported the submissions of Mr. Naphade and opposed those on behalf of the State Government.

SUBMISSIONS ON BEHALF OF KIRAN SHUKLA & OTHERS

66. Mr. Vashi, learned Counsel appearing for Kiran Shukla and others, submitted that under section 41(3) of the MHAD Act once a final notification is published in the Official Gazette, the land vests absolutely in the State Government free from all encumbrances on and from the date on which the notification is published. Once the land so vests in the State Government, the Government has to make it available to MHADA under section 42(3) of the MHAD Act for the purpose for which the land has been acquired and for discharging its functions, performing its duties and exercising its powers. In this connection, Mr. Vashi emphasised the provision in section 76(d) of the MHAD Act whereunder a duty is cast on the Repair Board to move the State Government to acquire the old and dilapidated buildings and which, in the opinion of the Board, are beyond repairs so that the buildings are reconstructed. Mr. Vashi pointed out that this sub-section clearly provided that this acquisition and reconstruction "for the purpose of housing as many occupiers of those properties as possible" and "for providing alternative accommodation to other affected occupiers". He therefore submitted that a joint reading of sections 41(3), 42(3) and 76(d) makes it very clear that MHADA has to develop the property to accommodate the existing tenants and also provide accommodation to other affected occupiers who are languishing in the transit camps.

67. Mr. Vashi submitted that when the earlier writ petition and the appeal therefrom against the acquisition of the property was decided by the Division Bench, these provisions were put in service by MHADA and the State Government to defend the acquisition and its proposed reconstruction. It was submitted before that Division Bench that when a property is developed by MHADA, a higher F.S.I. is available which is not available to a private builder and this is reflected in the judgment which clearly states that this additional F.S.I. is with a view to accommodate not only the existing tenants but also the several other needy persons. Mr. Vashi also pointed out that para 7 of the Division Bench judgment records that it was argued on behalf of Vinit Builders that a letter dated 18th August, 1990 was written subsequent to the acquisition by Deputy Chief Engineer of Prime Minister's Grant Project to the Chief Executive Engineer, Housing Board. The said letter recited that the Prime Minister's Grant Project had no objection to the Bombay (Repair) Board issuing a no objection certificate for redevelopment of the property (through a private builder). It was therefore submitted on behalf of Vinit Builders before that Division Bench that in view of that letter, acquisition had lapsed and had been given up. The Division Bench clearly expressed that it was unable to appreciate how the contents of the letter would amount to withdrawal of the land from acquisition once acquired under section 41(3) of the MHAD Act. Thereafter, the Court observed---

"Sub-section (3) of section 41 of the Act provides that where a final notification is published in the Government Gazette, the land shall vest absolutely in the State Government free from encumbrances. We are unable to appreciate how the land vested in the State Government can be released by Deputy Chief Engineer by writing letter to the Engineer."

Mr. Vashi therefore submitted that thus a submission of issuing an N.O.C. to a private builder subsequent to the acquisition was considered by the Division Bench in that judgment and was rejected. MHADA was estopped therefore from contending anything to the contrary and the judgment still holds the field.

68. Mr. Vashi then submitted that as per the order passed by a Single Judge of this Court in appeal from order referred to earlier, the development was to be taken in Joint Venture subject to the approval of the respondent No. 1. In the present case, the impugned N.O.C. was neither on the basis of Joint Venture nor with the prior approval of the State Government. Mr. Vashi submitted that the judgment of the Division Bench and the order of the Single Judge were binding on MHADA and without seeking any modification thereof, it was impermissible for them to take a contrary stand.

69. Mr. Vashi then submitted that as far as issuance of N.O.C. is concerned, it can be granted only by or with the approval of the State Government inasmuch as under section 42(3) of the MHAD Act, it is only the power of the State Government to make the land available to MHADA for development. Therefore, it was necessary that there has to be the concurrence of the State Government, in the event MHADA decides to pass over the project of reconstruction to somebody else. Under section 64 of the MHAD Act, MHADA has the power to deal with and dispose of the land vesting in it, subject to the Rules made by the State Government. Section 184 provides for the State Government to make rules for carrying into effect the provisions of the Act and section 184(2)(viii) provides for framing of Rules subject to which the authority may retain, lease , sell, exchange or otherwise dispose of any land, etc. under section 64 of the Act. Such Rules have been framed being the Maharashtra Housing and Area Development (Disposal of Land) Rules, 1981.

70. Mr. Vashi submitted that as per Rule 5 of these Rules, the land under the control of MHADA can ordinarily be disposed of only by grant of lease, exception being where the land is to be disposed of for raising loans. The rule further provided that as far as the land reserved for residential use is concerned, the lease could not exceed 90 years. He therefore submitted that the present N.O.C. giving rights of selling the F.S.I. to the builder after accommodating the existing tenants was in excess of this rule. He further submitted that even such disposal of land for residential purpose has to be made by (i) inviting tenders, (ii) or suitable offers, (iii) or through public advertisement on the basis of a pre-determined premium, (iv) or for industrial employees (v) or by public auction. This submission was made on the basis of Regulation 3 of the MHAD (Disposal of Land) Regulations, 1982 framed under section 185(1) of the Act. Mr. Vashi therefore submitted that the circulars of 1984-85 cannot supersede the above referred statutory Rules of 1981 and Regulations of 1982.

71. Additionally, Mr. Vashi submitted that if one looks to the circular of 1985, it spells out some 34 sites (which included Pimpalwadi) and which were specifically earmarked for accommodating the tenants affected in other projects in the surplus tenements. Even if the circular of 1985 was to apply, it will be Clause 3 thereof which would apply and not Clause 4 since at the time of issuance of this circular of July 1985, even the preliminary notification for acquisition of land was not issued. Clause 3 provided that where the action for acquisition had not been initiated and if the landlord had not come forward for reconstruction but tenants have come forward, the land be acquired. Accordingly, the present land had been acquired under section 41 and hence section 44 laying down the basis for determination of the amount of acquisition and the above referred Rules and Regulations will apply. As far as D.C.R. 33(7) is concerned, Mr. Vashi submitted that there was a contradiction in the stand of MHADA as disclosed in their reply and what was argued in Court. In their reply affirmed in September 2001, it was stated by Shri Pradeep Trivedi that the N.O.C. had been granted as per the circular of 1984-85 and not under Regulation 33(7). That apart, Regulation 33(7) applied to cessed buildings. Section 2(7) of the MHAD Act defines a "building" for the purpose of Chapter VIII to mean a building in respect of which a cess was levied. Once the property was acquired, it became exempt from the requirement of payment of cess under section 83 and would no longer be considered as a cessed building.

72. Mr. Vashi then submitted that the internal notes of MHADA showed a different story. The noting showed that the officers at the Engineer's level had placed the correct position before the higher authorities and on 26th February, 2001 the Chief Officer of the Repair Board had recorded that since the Joint Venture with F.S.I. 4 will take longer time, N.O.C. be granted with 2.5 F.S.I. subject to the approval of the Government. As against that the N.O.C. was issued on the next day without any such approval and Clauses 14 and 15 of the N.O.C. were peculiarly worded. Clause 14 provided that the development of the property by Joint Venture with 4 F.S.I. will have to be undertaken in accordance with the policy as may be approved by the Government in cases of cessed properties, and Clause 15 provided for cancellation of the land acquisition under section 41 of the MHAD Act. Mr. Vashi pointed out that though the initial para of this N.O.C. stated that it was granted for redevelopment rights with 2.5 F.S.I., this very clause included a rider that the N.O.C. permitted additional F.S.I. required for rehabilitation of the existing occupiers plus 50% of the incentive F.S.I., whichever was higher in accordance with the modified D.C.R. 33(7). Thus whereas Clause 14 provided for an approval of the State Government for construction at 4 F.S.I. in Joint Venture, under the opening clause of the N.O.C., F.S.I. of more than 2.5 could certainly be availed of and which may mean even 4 F.S.I. In fact, the letter of Shreepati Builders dated 15th February, 2001 is to the effect that the foundations and building designs will be made to accommodate construction at 4 F.S.I. Thus the N.O.C. was contrary to the earlier mentioned order passed by the learned Single Judge in A.O. (Stamp) No. 522 of 2001 inasmuch as it was not with prior approval of the Government. In this connection, Mr. Vashi submitted that the State Government was not agreeable to release the land from acquisition and hence even the construction at 2.5 F.S.I. under the N.O.C. could not be proceeded since that was in breach of Clause 15 of the N.O.C.

73. Mr. Vashi lastly submitted that the N.O.C. was not for the benefit of the State Government, MHADA, existing tenants or other tenants in the transit camp. He emphasised the letter dated 20th September, 2000 from Shreepati Builders to submit that the builders were not chosen by the tenants but were put forward by the Chairman of the Repair Board-Sachin Ahir, who was a sitting M.L.A. He submitted that MHADA was trying to favour the builder and that was apparent from Clause 7 of the N.O.C. That clause provided that the Repair Board will inform the builder as to how much will be the surplus built up area to be surrendered to the Repair Board after receiving the plans. However, on the other hand, in the affidavit of Shri Pradeep Trivedi dated 2nd July, 2001, it was clearly stated (which was also so stated in the internal notes) that there will not be any surplus area. Thus in that event, MHADA was giving up the original scheme of creating additional 133 tenements for the other displaced families. In the circumstances, Mr. Vashi submitted that the petition of Mangesh Mohite and others be dismissed and the one filed by Kiran Shukla and others be allowed. He submitted that at the most the legitimate expenditure of Shreepati Builders cannot be more than Rs. 30 lakhs. It can be covered from the builder who was prepared to develop the property after inviting tenders.

SUBMISSIONS ON BEHALF OF THE STATE GOVERNMENT

74. It was submitted on behalf of the State Government that the Government letters of 1984-85 would not govern the controversy inasmuch as the property was acquired much after those letters were issued. Besides, those letters clearly stated that they were applicable only in respect of cessed properties. Under section 2(9) of the MHAD Act, "cess" is defined as a tax on land and buildings levied or leviable under Chapter VIII of the MHAD Act. Section 83 of Chapter VIII granted exemption to certain buildings from payment of cess, and under section (b) thereof, lands vesting in the State Government were specifically exempted. Mr. Janardhanan, learned Additional Advocate General appearing with Mr. Rajendra Sawant, Government Pleader, submitted on behalf of the State Government that once the property was acquired by the State Government, no cess was required to be paid and thus the property ceases to be a cessed property. The acquisition of the present property was completed on 3rd December, 1988. Thereafter cess was not payable in respect of this property. Chapter VIII was not applicable to the land which was acquired under section 41 of the MHAD Act. Section 41 was placed in Chapter V of the MHAD Act which provided for acquisition of land and disposal of the property. These were two different provisions and could not be mixed up.

75. Mr. Janardhanan submitted that MHADA and Repair Board were agents of the State Government. The property was owned by the State Government and was to be made available to the authority for discharging its functions, duties and powers. Accordingly, it was handed over to MHADA for developing the property by MHADA. It was not handed over to MHADA for giving it to some third party. Mr. Janardhanan submitted that there were three types of acquisition under the MHAD Act. (i) The first was under section 41 of Chapter V which was principally for carrying out projects of MHADA. (ii) The second method of acquisition was under sections 92 and 93 under Chapter VIII which provided for repairs and reconstruction of the dilapidated buildings. Section 92(1) provided for pulling down dangerous buildings and acquiring such properties. Section 93(1) contained the consequent provision that on receipt of the proposal of acquisition under section 92, if the State Government was satisfied about its reasonableness and the resources available, it may approve the proposal of acquisition. (iii) The third mode of acquisition was under section 103-B in Chapter VIII-A which provided for acquisition of cessed property for co-operative societies of occupiers. Thus whereas section 103-B provided for acquisition of cessed property for co-operative societies and sections 92 and 93 provided for acquisition of old buildings which had become dilapidated, both these provisions were concerning cessed buildings. As against that, the acquisition under section 41 or for that matter the entire Chapter V nowhere mentioned cessed buildings. Mr. Janardhanan submitted that D.C. Regulation 33(7) also applied to cessed buildings and not to the property acquired by the Government under section 41 of the MHAD Act.

76. Mr. Janardhanan then submitted that under section 28(3)(iii) read with section 42(3) of MHAD Act, MHADA was holding the property as the agent of the State Government for carrying out the purposes of the Act. At the time when the acquisition was upheld by the Division Bench in its judgment of 6th July, 1994, MHADA had opposed handing over of the property to a private builder and had submitted that it will be developed by MHADA. Besides, in another public interest litigation, i.e. Writ Petition No. 1350 of 1998, MHADA had filed an affidavit that MHADA will reconstruct the property and accommodate the original residents and also those who were in the transit camp from other buildings. There is a reference to this public interest litigation in the notings of MHADA produced in this matter. The affidavit of MHADA in Writ Petition No. 1350 of 1988, amongst others, disclosed an action plan and Pimpalwadi is one of the properties mentioned in priority one for that purpose. In para 11 of that affidavit, it was affirmed on behalf of MHADA as follows:--

"However, projects will be undertaken to see that not only the existing tenants are accommodated in the reconstructed buildings, but in such reconstructed buildings, more number of tenements would be available to accommodate tenants of other buildings which cannot be reconstructed. The respondents have planned the reconstruction programme from the year 1998-99 upto the year 2002 to 2004, i.e. for a period of 6 years."

Mr. Janardhanan placed on record a copy of that affidavit affirmed by Shri T.M. Bhuvandas, Deputy Chief Engineer of the Repair Board in September 1998. Exhibit-1 to this affidavit contains the yearwise reconstruction programme. It is split into five priorities and in priority (1), 23 properties are mentioned. Pimpalwadi figures at Serial No. 17 therein. Accordingly, MHADA and Repair Board have taken further steps. They have got the plans approved, invited tenders and the contractor was asked to give security deposit for carrying out the work. It is at that stage that when the modalities of the reconstruction were virtually finalised that MHADA and Repair Board have suddenly taken a turn around.

77. The State Government was considering the question of Joint Venture as to whether 4 F.S.I. should be allowed for development purposes. A report was already received by the State Government under the Chairmanship of Mr. Suthkankar, former Commissioner of Mumbai Municipal Corporation, which had opposed grant of 4 F.S.I. since that would create tremendous pressure on these developed properties and on the services in the adjoining areas. That report was under consideration of the Government. But, in any case, the Government was very clear that if at all any such F.S.I. is to be permitted, the difference between 2.5 and 4 F.S.I. will have to be made available only to MHADA and Repair Board for a public purpose and will not be made available to any private builder. MHADA was therefore asked to give suggestions on the Joint Venture. The Government was principally agreeable to such a proposal with the rider as above after consideration of all aspects of such a Joint Venture but the final decision had not been arrived at. Mr. Janardhanan submitted that when Shreepati Builders came into picture, the officers of MHADA moved rather too fast and on 10th February, 2001 a Bhoomi Pujan on the plot was performed under Chairmanship of Shri Sachin Ahir. Thereafter an application was made on 15th February, 2001 that N.O.C. be given for the time being for 2.5 F.S.I. In all such matters, the initial decision had come from the State Government as can be seen from various N.O.Cs. produced on record. It is only on the recommendation of the State Government that thereafter MHADA or Repair Board have issued the N.O.C. even for construction with 2.5 F.S.I. In the present case, in utter disregard of the directions of the functionaries of the State, and in violation of the statutory provisions, the N.O.C. had been issued on 27th February, 2001. This N.O.C. even permitted the builder to seek cancellation of acquisition under Clause 15 of the N.O.C. That was impermissible.

78. Mr. Janardhanan submitted that initially there existed Chapter VIII in the Act which provided for repairs and reconstruction of the dilapidated buildings. That chapter was introduced while repealing The Bombay Building Repairs and Reconstruction Board Act, 1969 vide section 188(1)(c) of MHAD Act. This Chapter VIII existed in the Act since beginning i.e. from 1976. Chapter VIII-A, which provided for acquisition of cessed properties for co-operative societies, was introduced in March 1986 whereunder a mechanism similar to sections 92 and 93 of Chapter VIII was provided under section 103-B of Chapter VIII-A. However, as stated earlier, both these chapters deal with cessed buildings and not the buildings or properties which were acquired by the State Government and covered under earlier chapter i.e. Chapter V. The instructions 1984 and 1985 were issued when Chapter VIIIA was not in force. This was with a view to introduce a scheme to confer ownership rights on tenants of the cessed buildings. After coming into force of Chapter VIII-A, the internal letters lost their importance and cannot be relied upon. Mr. Janardhanan submitted that even otherwise the instructions of 1984 and 1985 will not apply to Pimpalwadi since the proposal to acquire Pimpalwadi was not even moved at that time. It was initiated much later. He submitted that MHADA was trying to bring in the proposal somehow under section 95-A of the MHAD Act, which occurred in Chapter VIII. He submitted that the benefit of section 95-A cannot be granted to any party, either the builder or the tenants, unless the property was released from acquisition which was not possible in the present case.

79. Mr. Janardhanan then pointed out that Mangesh Mohite and others have contended that the right to develop the property is de hors the purported N.O.C. of MHADA or the State Government and it flows from D.C.R. 33(7). In his submission, such an interpretation cannot be permitted. The D.C.Rs. are regulatory in nature insofar as development of property is concerned. They cannot be pressed into service for divesting the owner of his property merely on 70% occupants coming together without there being a statutory provision for acquisition and compensation. He thereafter submitted that the builders and Mangesh Mohite and others have made false statements. In his view, firstly it was not clear as to whether more than 70% people had given irrevocable consent with full understanding. A statement is required to be made in the affidavit-cum-undertaking to be given by the developer while applying for N.O.C. under D.C.R. 33(7) that it was on the understanding that the Repair Board had not declared the building unsafe under section 88(3) of the MHAD Act nor has it processed any draft reconstruction scheme or an acquisition proposal for said property. This statement was false to the knowledge of Shreepati Builders, Mangesh Mohite and others. The consent was obtained on a totally false basis and it will have to be held to be vitiated. Besides, the affidavit is made on the footing that Shreepati Builders were owners of the property when they very well knew that they were not. Their buying all the rights of Vinit Builders had no validity at all.

80. Mr. Janardhanan then submitted that under section 164 of the MHAD Act, Government had the power to give directions to MHADA and suspend its N.O.C. Under section 165, the State Government had the power to order an inquiry. Section 166 gives powers to the State Government to reconstitute the authority or the Repair Board. Section 166(2) provided that the opinion of the State Government in this behalf to reconstitute the authority or the Board was final. Section 167 permitted the Government to take action against MHADA for default in performance of its duties. Under section 168, an administrator could be appointed and under section 169 the authority could be dissolved. All these provisions read with sections 184 and 185 make it clear that MHADA is an agent of the Government and has to act in accordance with the Government guidelines and the Act and the Rules. On the other hand, in the present matter, it had colluded with the builder and sold the Government land. Mr. Janardhanan relied upon a judgment of the Apex Court in the case of State of Kerala v. N. Bhaskaran, , wherein the Apex Court has laid down that once the property is acquired for a purpose, it has to be used for that purpose only.

81. In the circumstances, Mr. Janardhanan submitted that MHADA be directed to complete the construction within a period of 2 years to rehabilitate the residents of the Pimpalwadi and those languishing in the transit camp by making 133 more tenements available. He pointed out that every year the amount of cess collected by the Repair Board comes to around Rs. 30 crores. With the Government's matching contribution of Rs. 30 crores and Municipality's contribution of Rs. 10 crores along with MHADA's contribution of Rs. 10 crores, every year substantial amount is available to MHADA and the Repair Board. He submitted that for the last couple of years the budget for reconstruction has not been used and portions of it have been diverted for other purposes. In the above referred Writ Petition No. 1350 of 1998, it was stated by MHADA in September 1998 that nearly Rs. 100 crores were available with it for repairs and reconstruction. As per that affidavit, funds are earmarked for Pimpalwadi Project. He submitted that despite this position, handing over prime property to the builder by MHADA was against public interest. He therefore submitted that the petition of Mangesh Mohite and others deserves to be dismissed and the one filed by Kiran Shukla and others be allowed with appropriate directions.

82. Before we deal with the submissions advanced by the learned Counsel for all the parties in order to appreciate them in the proper perspective, it would be desirable to look to the historical background of the development of the law in this behalf:--

HISTORICAL DEVELOPMENT CONCERNING THE RIGHTS OF THE TENANTS OF THE BUILDINGS DEMOLISHED ON ACCOUNT OF HAVING BECOME DILAPIDATED

As far as the rights of the tenants are concerned, prior to the enactment of the Bombay Rent Act, the view taken was that if a building became dilapidated and collapsed due to the passage of time, the tenancy also came to an end. The Bombay Rent Act, 1947 made a significant change in this position. Section 13 of this Act provided for the grounds on which a landlord may recover the possession by applying to the premises by obtaining a decree for possession from the concerned Court. Otherwise the tenant in the areas covered by the said Act would not be evicted from the tenanted premises. Section 13(1)(hh) made a provision that the landlord may recover the possession of the premises consisting of not more than two floors where they are reasonably and bona fide required by the landlord for the purposes of demolishing the building and the demolition is to be made for erecting a new building. This section 13(1)(hh) is to be read with sub-sections (3-A) and (3-B) of the said section. Sub-section (3-A) provided that such a decree for eviction will not be passed unless the landlord produces the certificate granted by a certain Tribunal under sub-section (3-B) and gives an undertaking as contained in sub-section (3-A) with respect to the area to be provided in the new building and the time frame for the beginning and completion of the work.

83. Thus the position was this-wise that if the tenanted buildings of ground plus two storeys became dilapidated and were required to be demolished, the landlord could do that provided of course the tenant is rehoused in the new building by providing an almost equivalent space. The Bombay Rent Act was repealed and replaced by the Maharashtra Rent Control Act, 1999 which came into force from 31st March, 2000. Section 16(i) of the New Act is corresponding to section 13(1)(hh) of the Bombay Rent Act and sections 19, 20 and 21 of the New Act are corresponding to the provisions contained in sections 17-A, 17-B and 17-C of the earlier Act.

84. As noted above, although a provision for the protection of the tenants of dilapidated buildings was made in the Bombay Rent Act, it was restricted to the buildings having ground plus two storeys only until the Maharashtra Rent Control Act, 1999 came into force on 31st March, 2000 and the limit of two storeys was removed. In the meanwhile, the problem of large number of houses collapsing in Greater Bombay every year had necessitated the evacuation and relocation of persons and caused a considerable loss to the lives and properties. The State Government and the Municipal Corporation of Greater Bombay were anxiously concerned with this situation. It was felt necessary to have a suitable legislation for preventing house collapses and salvaging dilapidated buildings and reconstructing them wherever necessary and to provide for levy of an additional cess to meet the expenditure in this behalf. The State Government therefore came up with the Bombay Building Repairs and Reconstruction Board Act, 1969 which came into force from 31st December, 1969. The Act provided for levy of a cess in a particular manner on the tenanted properties in the city of Bombay and to utilise the said fund for undertaking structural repairs to buildings which were in ruinous condition and which were likely to fall and also to reconstruct those buildings which could not be repaired in reasonable expenditure and which were required to be demolished. The tenants of the demolished buildings were to be accommodated in the transit camps in the meanwhile and subsequently in the buildings on the particular plots when reconstructed. This Act was subsequently repealed when Maharashtra Housing and Area Development Act came to be passed in the year 1976.

THE ORIGINAL MHAD ACT PROVIDING FOR ACQUISITION IN TWO CIRCUMSTANCES

85. As far as the MHAD Act of 1976 is concerned, it repealed and replaced the earlier Bombay Housing Board Act, 1948 and it also made provisions in Chapter VIII thereof with respect to repair and reconstruction of buildings, for which there existed earlier the above referred separate enactment, namely Bombay Repairs and Reconstruction Board Act, 1969 which was also repealed by this Act amongst others. Thus this Act was passed as a comprehensive legislation to unify, consolidate and amend the laws relating to housing, repairing and reconstructing dangerous buildings and carrying out improvement works in slum areas. This Act, as it originally stood, had two provisions for acquisition of land; one contained in Chapter V which provided for acquisition of land and disposal of property of the authority, and another in Chapter VIII which provided for repairs and reconstruction of dilapidated buildings. As far as Chapter V is concerned, section 41 therein gave the power to the State Government to acquire the land where on the representation from the authority or any Board, it appeared to the State Government that in order to enable the authority to discharge any of its functions or to exercise any of its powers or to carry out any of its proposals, plans or projects, it was necessary that the land should be acquired, the State Government may acquire such land. Thus essentially the acquisition under section 41 was for the purposes of carrying out the proposals, plans or projects of the authority. As against that, under section 93 read with section 92 of Chapter VIII the acquisition was guided by two considerations; one was as provided under section 92(1) where a building collapses or becomes ruinous and the Board formed an opinion under section 88(3) that the cost of structural repairs to a building will be exorbitant and will exceed the permissible limit or where the Municipal Commissioner has given the notice to pull it down under section 354 of the Bombay Municipal Corporation Act. The other circumstance as per section 92(1) was where the Corporation passed a resolution under section 354-R of that Act declaring it as falling in a clearance area. Then under section 92(3) of this Chapter, the Board may move the State Government to acquire the property under the provisions of this chapter. Thereafter under section 93(1), the State Government has to be satisfied about the reasonableness of the proposal and of the resources available with the Board for reconstructing a new building and then the Government was to approve the proposal and communicate its approval to the Board. Thus it can be seen that the purpose of acquisition under these two chapters was different, whereas the one under Chapter V was for the purposes of the proposals, plans or projects of the authority. The one under Chapter VIII was for the reconstruction of dilapidated buildings.

86. It is thereafter that in the year 1984 and 1985 that the Government has come with the scheme of reconstruction of the old and dilapidated cessed buildings with the participation of the owners and tenants/residents of the old and dilapidated buildings. This was proposed since the funds available with the Board were found to be insufficient to implement the scheme. That is what the Government letter of 1st December, 1984 clearly states. The subsequent Government letter of 5th July, 1985 makes a further advancement over this letter, but it is also very clear that this letter was written on the background of large number of families from the demolished buildings residing in the transit camp for a long period and therefore the authority was advised to select sites where additional premises on a large scale will be available for rehabilitation of those families. It is for this purpose that 34 sites were selected and Pimpalwadi was mentioned at Serial No. 4 therein. At the time of this notification, the land acquisition proposal for a Pimpalwadi was not even initiated. It was initiated much later. Therefore, it would be Clause 3 of this letter which would be relevant for the purposes of acquisition of land at Pimpalwadi since this clause provides that if the land acquisition had not been initiated and where the landlord did not come forward for the purpose of reconstruction, the action to acquire be initiated.

ADDITION OF CHAPTER VIII-A PROVIDING ACQUISITION IN A THIRD SITUATION

87. It is thereafter that Chapter VIII-A was added in the MHAD Act by Maharashtra Act No. 21 of 1986 to provide for acquisition of cessed property for co-operative societies of occupiers. It is in this chapter that a third mode of acquisition of cessed properties for co-operative societies was provided under section 103-B of this Chapter. It is material to note that this section clearly states that these provisions are notwithstanding anything contained in Chapter VIII. This was with a view a enable the occupants of old buildings to come together. Where 70% or more of such occupants come together and where it is a cessed building erected prior to 1st September 1940 and is classified as belonging to Category "A" under section 84(1), in that case this Chapter would apply as provided under section 103-A. Thus, this was a third situation wherein acquisition was proposed for buildings constructed prior to 1st September, 1940 where 70% of the occupants came together. They were required to form a society and required to deposit 30% of the approximate amount, that would be required, to the owner if the land was acquired as directed under section 103-B of the MHAD Act.

88. (a) Thereafter by using the power under section 31 of the Maharashtra Regional and Town Planing Act, the Development Control Rules were framed which came into force on 25th March, 1991 under Government Resolution of 20th February, 1991 and were subsequently amended from time to time and what we have as of now are the D.C. Rules as amended under the Government Gazette of 25th January, 1999.

(b) Section 95-A of the MHAD Act was brought in after the framing of the D.C. Regulations in 1991 by Amending Act No. 16 of 1998 and that was with a view to make available to the buildings which were covered under Chapter VIII of the Act, a certain facility where 70% of the occupants and landlord came together for reconstruction.

89. Thus now the three different circumstances wherein acquisition would be resorted to are as follows:--

(a) Under section 41 of Chapter V, which is for the proposals, plans and for projects of the authority.

(b) Acquisition of the dilapidated or collapsed cessed buildings for reconstruction by the Repair Board under section 93(1) read with section 92 of Chapter VIII of MHAD Act exception being a situation where more than 70% of the occupiers and the landlord thereof come together and propose a reconstruction by their co-operative society. In such a case, the facility of temporary accommodation and evicting the non-co-operating occupants for restructuring the building is made available under section 95A introduced in Chapter VIII. Obviously in view of 70% of the occupants and the owner coming together for this reconstruction, there is no occasion to acquire such a building.

(c) The third situation being where the building is erected prior to 1st September, 1940, it is a cessed building and where more than 70% of the occupiers come together, then under section 103B of Chapter VIII-A they will be helped by the State Government by acquiring the property for their benefit provided of course they deposit with the Board 30% of the approximate cost of acquisition under sub-section (3) thereof. Remaining cost of acquisition is to be subsequently recovered as provided under, sub-section (6) thereof.

F.S.I. and the right to develop the property on one's own-provisions under the Development Control Regulations.

90. The Development Control Regulations mentioned earlier are divided in five parts. They are (i) Administration (ii) General planning requirements (iii) General building requirements (iv) Land use classification and uses permitted and (v) Supplemental and miscellaneous provisions. In the first part on administration, we have provisions amongst others regarding applicability and definitions and procedure for obtaining development permissions, commencement certificates, etc. Regulation 3(42) defines a floor space index as follows:-

'(42) "Floor Space Index (F.S.I.)" means the quotient of the ratio of the combined gross floor area of all floors, excepting areas specifically exempted under these Regulations, to the total area of the plot, viz.:-

Total covered area on all floors

Floor Space Index (F.S.I.) = ---------------------------------------- Plot area.

In the second part on general planning requirements, there are provisions regarding land uses and the manner of development. There are specific provisions regarding prohibitions of factories in residential zones, provisions regarding public streets, layouts of land and land-sub-division, recreation areas, open spaces, etc. Regulation 32 provides for Floor Space Indices and tenement density and Regulation 33 makes a provision for additional Floor Space Index which may be allowed to certain categories. There are 13 categories as have been quoted earlier and different F.S.I. is provided for the different categories considering the requirement of the particular category. Now as far as the reconstruction in respect of cessed properties located in the island city, which attract the provisions of the MHAD Act to be taken up by co-operative housing societies is concerned, the F.S.I. made available is 2.5 as per the provision quoted earlier. This F.S.I. is subject to provision of Appendix III to these Regulations. This Appendix III lays down how much should be the minimum area for a tenement and how much should be the maximum. Clause 11 of this Appendix III lays down that the decision with respect to the F.S.I. to be allowed under D.C.R. 33(7) is to be taken by the Municipal Commissioner only after he is satisfied that the said society fulfills all conditions to be eligible for the benefits under this Regulations. Clause 4 of this Appendix III provides that the tenements in the reconstructed building shall be allotted by the occupant society as per the list certified by the Bombay Housing and Area Development Board and from amongst them. It also provides that the prescribed percentage of the surplus built up area as per the Third Schedule of the MHAD Act is to be made available to the Bombay Board for accommodating the other tenants in the transit camp of the cessed building which cannot be reconstructed. Thus as far as the co-operative societies of the occupants of the cessed buildings either under section 103B or 95A are concerned, there is no requirement under the MHAD Act or the Regulations that they should invite tenders for selecting the developer. This is because under both the provisions 70% of the occupiers have moved the proposal. In the case of a proposal under section 103B, they form or propose a co-operative society and then approach the board without the landlord, but with 30% of the acquisition amount. Under section 95A, they approach the board for the N.O.C. along with the landlord. Under both these situations, therefore, it is quite understandable that they are permitted to select their own developer, and it is not necessary for them to invite any tender. In fact, the so-called developer is nothing but a contractor for construction when the work is executed under these two sections.

APPLICATION OF THESE PROVISIONS TO THE PRESENT CASE:

91. In the present case, it is neither a situation falling under section 95A nor one under section 103B as the conditions precedent are not satisfied. As far as section 103B is concerned, the 70% tenants have to deposit 30% of the cost after forming or proposing a co-operative society in a cessed building where it is constructed prior to 1st September, 1940. It is nobody's case in the present matter that the tenants have collected any such 30% contribution and are invoking the provisions of section 103B. As stated above, under section 95A it is necessary for the landlord and 70% of the occupiers to come together. In the present case, it is also not the case of Shreepati Builders that they have moved into the matter as landlords or purchasers of the property. Thus there is no dispute that the acquisition of this property is governed under section 41 which falls under Chapter V of the Act.

WHETHER 70% OF THE OCCUPIERS GAVE CONSENT AND THAT TOO FREELY AND WITH FULL UNDERSTANDING:

92. (a) There is however a serious dispute as to whether 70% of the occupiers have really come together with full understanding and have given free consent which is the first question one has to examine. It was contended by Mr. Janardhan, learned Additional Advocate General, that the consent was vitiated as it was given on a false representation by the developer that the property was not acquired by the Government or no steps were taken by the Repair Board to repair it. He drew our attention to the form of affidavit-cum-undertaking required to be given by the promoter while applying for developing the property under D.C.R. 33(7). It is a part of the brochure annexed as Exhibit '3' to the affidavit of Mr. Trivedi of the Repair Board dated 7th August, 2001. It contains a copy of the format of the application for N.O.C. as per D.C.R. 33(7). This application has 3 Annexures. Annexure 'I' is occupants irrevocable consent. Annexure 'II' is the affidavit-cum-undertaking to be given by the developer and Annexure 'III' is his indemnity bond given to the Repair Board. For the application of the developer to be processed under D.C.R. 33(7), it has to be complete with these three annexures. In para 4 of the above affidavit Mr. Trivedi has stated that R.R. Chaturvedi & others (of Shreepati Builders) have applied to the Board for the purpose of granting the N.O.C. "in accordance with the amended D.C.R. 33(7)". Clause 11 of this affidavit-cum-undertaking reads as follows:-

"I/we declare that the Repair Board has not declared the buildings under section 88(3)(a) of MH & AD Act, 1976 or processed a Draft Reconstruction Scheme/Land Acquisition Proposal for the above mentioned property. The work of redevelopment has not started yet. I/we further declare and state that previously the landlords/their power of attorney holder have/have not (specify) applied for redevelopment. The tenants/occupants proposed Co-operative Housing Society has/has not (specify) submitted a proposal to the Board under section 103B of MH & AD Act, 1976."

(b) Kiran Shukla and others have clearly stated in their petition that there was no attempt to take the tenants into confidence and therefore they sought information. Their petition states that they were asked to sign the consent affidavits by giving them to understand that after the N.O.C. is received, they will be given particulars and negotiations will be held with them. The information was not given. Therefore even as Mangesh Mohite accepts in his petition that 42 occupants withdrew their consent on 17-3-2001, Shreepati Builders reacted by writing on 25-3-2001 that they cannot withdraw the consent. Later on, many more occupants resorted to withdrawal and in his affidavit dated 10th September, 2001 Mr. Vyas, Deputy Secretary, has stated that the Government has withdrawal letters from more than 127 of the tenants. Repair Board, Mangesh Mohite and Shreepati builders claim that the consent was verified on site but there is no denial of this statement of Mr. Vyas. Besides, this verification is disputed by Mr. Kiran Shukla in his affidavit of 14-8-2001. A separate Chamber Summons bearing No. 171 of 2001 has been taken out on behalf of 41 displaced occupants of this property staying in the transit camp for years together. They are opposing the development by the builder. In this situation, prima facie, it is difficult to accept that Mangesh Mohite and others have 70% of the 335 occupants supporting this scheme, and that too with free will and full understanding.

(c) It is also clear that the Repair Board has not explained the project properly to the occupants before carrying out any verification. In fact the stand taken by the Repair Board is extremely bureaucratic, viz. that the rules do not provide for giving any such information. No document is placed before the Court of any meeting of 70% of the tenants coming together wherein the entire pros and cons of the project being explained and thereafter the decision having been taken. In fact, the speed and the manner in which Shreepati Builders have moved into the matter indicates to the contrary. Mr. Kiran Shukla in his affidavit in reply dated 3-7-2001 to Chamber Summons of Mohite has stated in para 4-f(iv) that under the Scheme of builder the old tenants occupying 2/3rd land will be cramped into one 20 storied tower (with six lifts) to occupy 1/3rd of the land. Considering that all the occupants are mostly from economically weaker section or middle class, they will not be able to afford the maintenance of the building. Inspite of this specific averment in the affidavit, no information is placed by Shreepati Builders about the nature of proposed construction even before this Court.

(d) Last but not the least, Mohite's petition annexes at Exhibit 'X' a letter from Mr. Tated, Shukla and others received by Shreepati Builders which seeks a meeting to express their views in free atmosphere "without any fear or favour". The endorsement by Shreepati Builders thereon dated 31st March 2001 is to hold a meeting in their office which could be held "without any fear psychosis". This, in any case, gives an indication as to the sense of fear of a section of the tenants.

(e) Thus it is clear that the consent affidavits were obtained by the developer without making a true declaration, that the nature of the project has not been properly explained to the occupants before taking their consent and that the Repair Board has also not cared to explain it to them before any verification. Besides, one is not very sure whether the occupants gave their consent freely and whether their number exceeds 70%. It was submitted by Mr. Naphade that consent once given was irrevocable in this scheme and at one stage 79% of the occupants had signed consent affidavits on the basis of which the application was moved by builder. For any such submission to be accepted, it is necessary that the consent is sought after fully explaining the nature of the project and its consequences. That is the responsibility of the Board also. Besides, the Board has to see if the contents of the developer's application and undertaking are true. In the absence of any such information, this proposition cannot be accepted. It is again very important to note that the entire basis of the case of Shreepati Builders is that they are invited by more than 70% of the occupants. If there is no such support base, they cannot insist on their continuation. This is particularly so when withdrawal of consents took place at a time when they had not incurred any major expenditure.

Applicability of instructions of 1984 & 1985 to Pimpalwadi

93. It is submitted by Mangesh Mohite and others and by MHADA, Repair Board and Shreepati Builders in their support that they have a right to develop the property on their own having a developer/builder of their choice and there is no need of any N.O.C. or prior approval from the State Government. It is their further case that they are also entitled for F.S.I. of 2.5 like the occupants of the cessed buildings falling under sections 95A and 103B who would benefit under D.C.R. 33(7). As far as F.S.I. 4 is concerned, they do not dispute that a participation and approval of the State Government would be required and it will be a joint venture. However, as far as F.S.I. 2.5 is concerned, it is their submission that they are situated similarly to the 70% occupants of a property which would benefit under section 95A or section 103B. Mr. Naphade, learned Counsel for Mangesh Mohite and others, submitted that for this purpose, one has to see the spirit behind these provisions. Even if the State Government has acquired the land, so long as the 70% of the occupants come forward, MHADA and the Repair Board have to hand over the property to them for development as per their choice for the development of this property under D.C.R. 33(7). As against that, MHADA and Repair Board in their affidavits took a stand that the Government letters of 1984 and 1985 governed the disposal of these lands. It was submitted that 1984 and 1985 letters were for all times to come and should not be read in a restrictive way.

94. While considering this submission with respect to the letters of 1984 and 1985, one has to note that they contained the instructions of the State Government at a time when the MHAD Act of 1976 had already come into force and in view of the actions with respect to the demolition and reconstruction, a large number of occupants of the demolished buildings were languishing in the transit camps. As the letter of 1984 shows, it was meant for reconstruction of dilapidated cessed buildings. A financial crunch was felt by the Government and therefore participation of the occupants and landlords in the development programme was felt desirable. In the letter of 1st July, 1985 also that approach is reflected. In this letter, it is clearly stated that for this purpose some 32 sites had been selected (after leaving 2 sites for which N.O.C. was already issued). One of these sites was Pimpalwadi. A higher F.S.I. was proposed, but these sites were selected essentially because they consisted of large areas where construction of additional premises for occupants from the transit camps would also be possible. An emphasis was sought to be laid by MHADA on Clause 4 of this letter. That clause states that where acquisition was completed, but work of construction was not started, and if a request of a co-operative society of landlord and resident is received, then such land should be first allotted to the concerned society on license basis and on completing the building, it should be leased out for a period of 90 years. From this reconstructed property also, a certain proportion of tenements were sought to be retained for the other occupants of transit camp. It was submitted by Mr. Naphade that this policy was for all times to come. Now, in this connection, one must note that the letters of 1984 and 1985 were written in a particular context. The letter of 1985 specifically refers to some 34 sites. As Clause 4 of that letter itself states, it will have to be read as applicable to those lands where the land acquisition had been completed till the date of issuance of that letter. That alone can be the plain reading of that clause. The only other clause of this letter, which could be relevant, is Clause 3 which states that where land acquisition had not been initiated and if the landlord did not come forward with a proposal of reconstruction but the tenants came forward, then the action for acquisition be initiated. In the present case, the proposal for acquisition of land was not even initiated in the year 1985. It was initiated much later. That being so, there is no question of reading Clause 4 of this letter as sought to be canvassed by MHADA nor would the present acquisition be governed under that.

Can the State be dictated to give up the land to private developer.

95. Alternatively, it was submitted that although this property is acquired by the State Government under section 41 of the MHAD Act, under section 41(3) the State has to make it available to the authority and it is submitted that "to make available" means to transfer the title in the property. Once the land is made available to the authority, it is supposed to hold it under section 28(3)(iii) of the MHAD Act, and then it was submitted that "to hold" means "to possess with legal title". Mr. Naphade has canvassed that the phrase "to make that land available" under section 42(3) will mean "to transfer the title in that and has relied upon the judgment of the Apex Court in the case of Municipal Corporation of Greater Mumbai v. Hindustan Petroleum Ltd., reported in J.T. 2001(7) S.C. 270 (supra). That was a case wherein the respondents were discharging their effluents in the water courses. The Municipal Corporation demanded the sewerage charges for this discharge. The defence of the respondent was that the drains were neither vested nor belonged to the Corporation and hence the corporation was not entitled to levy the sewerage charges. In fact, the land through which the drains were passing was acquired by the State Government. The plea of the respondents was accepted by the High Court and when the matter was carried to the Apex Court, the Apex Court referred to the relevant section 220-A of the Bombay Municipal Corporation Act on vesting of water courses and held that until the procedure therein was followed, it cannot be said that the water courses vested in the corporation. The Apex Court held as follows in para 17 of the judgment:-

"For the aforesaid reasons we hold that merely because the corporation is entrusted with the duty to maintain water channel and drain and therefore the water channel and drain belonging to the Government vest in it is not correct. Vesting in the corporation of water channel and drain belonging to the State Government can only take place in the manner provided under section 220-A of the Act. We accordingly reject the arguments of learned Counsel for the appellants."

Thus, in fact this judgment does not help MHADA in any way. In the present case, inasmuch as the acquired land vests in the State Government, the authority to deal with it in an appropriate manner will be with the State Government. The Act requires the acquired land to be used for discharging the functions, performing the duties and exercising the powers or to carry out any of its proposals, plans or projects as laid down under section 41(1). In the instant case, right from 1985 it was very clear to the State Government and MHADA that Pimpalwadi was one of the 34 large projects which were useful for accommodating dishoused occupants languishing in the transit camps. The property was made available to MHADA and Repair Board to carry out the project and they had taken a number of steps in that direction including getting the plans passed and issuing the advertisement for constructing the transit building on the site. It was therefore not permissible for MHADA and Repair Board to act contrary to this purpose. The land was made available to MHADA under section 42(3) for this purpose. The phrase "to make land available" occurring in section 42(3) and to hold it under section 28(3)(iii) cannot be read de hors these objectives to defeat them. Similarly there cannot be a quarrel with respect to interpretation of the phrase "to hold" as laid down in the cases of K.K. Handique and Manohar Ramkrishna (supra) relied upon by Mr. Naphade, or the dictionary meaning thereof emphasized by Mr. Singhvi, but it has to be seen in what context the verb "to hold" has occurred in section 28(3)(iii) with which we are concerned in the present matter. When one sees that, it is clear that it cannot mean an authority or right to hold it and to deal with it contrary to the purpose for which it is entrusted, and that too without any approval but in the teeth of opposition from the State Government.

96. Mr. Singhvi and Mr. Naphade submitted that merely because the property was acquired, it was not permissible to say that it was not longer a cessed property. Mr. Singhvi submitted that MHADA and Repair Board were the only agencies through which the State could act and the State Government was duty bound to hand over the land to MHADA and Repair Board. The only role for the Board was to examine as to whether 70% of the occupiers had come together and there was no provision in the law to require and clearance from the Government. It was submitted by Mr. Naphade that what applies to D.C.R. 33(7) would apply to D.C.R. 33(9) also, which provided for F.S.I. and for public renewal schemes. The submission of Mr. Singhvi was that under Clause 11 of Appendix III to D.C.R. 33(7), the Municipal Commissioner had the authority to find out as to whether the co-operative society concerned fulfills all the conditions of eligibility for the benefits. Thus according to him, the Board had only the role of scrutinising 70% consents and depending upon the satisfaction of the Municipal Commissioner, appropriate F.S.I. would be allowed. If there is any excess space available as per Third Schedule to the MHAD Act, those many tenements would be made available to MHADA under Clause 4 of Appendix III. In his submission, this was the scheme contemplated under these provisions and it had to be enforced as it is. This argument overlooks the fact that the land and buildings which vest in the State Government are exempt from payment of cess under section 83(1)(b) of the MHAD Act. Obviously once the property is acquired, the State will not be required to pay cess. A cessed property is a property which is owned by private landlords or various parties who do not enjoy the exemptions of section 83. They are required to pay the repair cess and from that repair cess the repairs of those buildings are carried out and if necessary the property is acquired for reconstruction. As far as the exempted properties such as those owned by the State Government are concerned, there is no requirement of paying cess and the State Government has itself to take care of its own properties.

97. In this connection, it is relevant to note that when the occupants of the cessed properties approach the Board along with the landlord, certain facility is granted under section 95A of the MHAD Act. Similarly when they approach with 70% majority but without the landlord and pay 30% of the amount, a scheme of acquisition is made available under section 103B of the MHAD Act. There is no occasion of extending any such facility to the properties acquired by the State. A property is acquired under section 41 of the Act principally to carry out the proposals, plans or projects of the State. These are proposals, plans and projects in the context of this Act, namely development, reconstruction and renewal. When that is the object and when acquisition amount is also to be paid by the State Government, there is no question of paying any cess on such property. Such property therefore cannot by any reason be considered as cessed property. The interpretation canvassed by Mr. Singhvi, if it is to be accepted, will lead to giving up by control of the State Government over this development process. Chapter V of the Act has objectives which are distinct and wider than those of Chapter VIII and Chapter VIII-A. If the interpretation canvassed by Mr. Singhvi is accepted, and applied to the properties acquired under Chapter V, the State Government will only become an agent of such property developers where the concern will be only to accommodate the present occupants by giving them minimum space and utilise the remaining space for profits leaving the occupants of transit camps in the lurch. That will only lead to defeating of a beneficial legislation. That was not the object with which the power of acquisition is taken under Chapter V and that was also not the object for which 34 large properties were earmarked for providing accommodation to the dislodged families languishing in the transit camps for years together.

98. It is also not possible to accept the submission of Mr. Naphade that what applies to D.C.R. 33(7) will apply to D.C.R. 33(9). D.C.R. 33 has in all 13 different categories and for them different F.S.I. has been provided. When MHADA or Bombay Housing Board or Municipal Corporation take up an urban renewal scheme or the repair and reconstruction of cessed buildings, a higher F.S.I. is provided under D.C.R. 33(9). When these authorities make such schemes, they are made for rehabilitating the dishoused persons of the particular project and those from elsewhere. These projects are undertaken by public bodies and the entire developed property will be made available for those for whom it is meant. Therefore, there is no question of anything being especially made available by them to MHADA as under Clause 4 of Appendix III. This is because MHADA, Board or Municipal Corporation itself is undertaking to develop it in its entirety for rehabilitations. Hence the submission that what applies to D.C.R. 33(7) applies to D.C.R. 33(9) cannot be accepted.

99. It was then submitted by Mr. Naphade and Mr. Reis that with respect to four other properties, which were acquired both under sections 41 and 93, N.O.C. was given by MHADA to the property developers as permitted by the State Government and there is no reason why it should not be permitted in the present case. Now as far as this aspect is concerned, it is an aspect on which the State Government has to be left with the authority to take a decision. Where the properties are comparatively small, it is quite possible that the State Government may permit the development through a developer of the choice of the occupants. Besides, it is material to note that these properties were acquired both under sections 41 and 93. As against that, where the properties are large and where there is a clear possibility of accommodating the persons from other projects who are suffering and where they are acquired exclusively under section 41, the State Government is not expected to give any such N.O.C. In fact, that is what is expected. This is because, as admitted earlier in an earlier Public Interest Litigation by the State itself, a large number of people are languishing in Transit Camps and it is necessary to accommodate them at the earliest. To that effect, an affidavit was filed by the concerned Engineer of the Repair Board in P.I.L. Writ No. 1350 of 1999, as pointed out earlier by Mr. Janardhanan, learned Additional Advocate General. The State Government and MHADA were bound by the statements made by them in the affidavit in that matter.

Responsibility of MHADA and Repair Board to act in consonance with the Directive principles:

100. The submission of Mr. Vashi on the correlation between sections 41(3), 42(3) and 76(d) in this behalf is well taken. Section 76(d) casts a duty on the Repair Board to acquire old and dilapidated buildings and to reconstruct them not only to accommodate the occupiers of those properties, but also to provide alternative accommodation to other affect occupiers. The land is made available by the Government to MHADA and Repair Board for discharging this duty under section 42(3) of the MHAD Act after it vests in the State under section 41(2). MHADA and Repair Board being agents of the State Government cannot ignore this solemn responsibility which is cast on them. In fact, this was the submission which was canvassed on behalf of MHADA when the challenge to acquisition was repelled before the earlier Division Bench. The Division Bench, as quoted earlier, has in clear terms noted that the reconstruction by the State and its agencies was desirable since that would provide accommodation to a large number of families. In that petition, the earlier owners i.e. M/s. Vinit Builders had given a better proposal to the tenants and still it was turned down and opposed by MHADA contending that MHADA wanted to develop the property. It is no use for MHADA to contend that the particular stand was taken when the funds under the Prime Minister's Grant Project (PMG) were available. The funds from the PMG Project may not be now available, but Mr. Janardhanan, learned Additional Advocate General, has pointed out that large funds are available with the Repair Board through the collection of repair cess as well as the contribution from the State and the Municipal Corporation. Besides, the rates of interest and particularly for housing projects are presently reduced. This being the position, the Repair Board and MHADA cannot shirk their responsibility. It cannot be permitted to take a different stand from litigation to litigation. When this legal position was clear on their files recording the orders in two writ petitions, the least that was expected of them was to move this Court for a modification. Without doing that and without any approval from the State Government, they have moved to issue the N.O.C. to a private builder. Under this statute, MHADA and Repair Board are trustees of the displaced families. There is a responsibility cast on them. That responsibility is in accord with the directive principles of the constitution and they are expected to act in consonance therewith. In the context of section 44 of this Act, the Apex Court has already observed in para 14 of State of Maharashtra v. Basantibai, "that the Act is brought into force to implement the directive principles contained in Article 39(b)". MHADA and Repair Board are duty bound to discharge their obligations. They cannot throw their hands and conveniently say that they are not in a position to develop the scheme for financial difficulties and better it is handed over to a private builder. This becomes particularly difficult to swallow when the decision is taken in the teeth of the opposition from the State Government.

101. It was sought to be contended that the minutes of order arrived at before a Single Judge in A.O. (Stamp) No. 522 of 2001 were binding on the State Government. Reliance was placed on the judgment of the Apex Court in the case of Salkia Businessmen's Association v. Howrah Municipal Corporation, . In the present

case, as has been recorded above, the appeal was withdrawn against the State Government as recorded in the minutes specifically. The minutes stated that understanding was arrived at between MHADA and builders, but that was subject to the approval of the State Government. There was no such approval taken and the State Government cannot be made to concede to this approval. Similarly reliance was placed on the judgment in the case of V.M. Kurian v. State of Kerala, . That was a case where recommendation of the Chief Town Planner was held to be sine qua non for grant of exemption from operation of rules by the State Government. The question involved was whether public safety ad convenience require dispensing with the provisions of the rules while permitting construction of 8 stored building. In this case, neither the recommendation of the Development Authority nor that of the Chief Town Planner was obtained to contradict the view-point of the Development authority while granting exemption from the operation of the Rules. That being so, the Apex Court held that the recommendation of the Town Planner would operate as the exemption. This was sought to be pressed into service to canvass that approval from the Repair Board was enough. As stated earlier, the facts of the present case are quite different and at no stage the approval of the proper authority i.e. State Government was sought or granted.

102. Mr. Singhvi had submitted that the notings cannot be used for criticising the officers. He relied upon the judgment of the Apex Court in the case of State of Bihar v. Kiran Shankar (supra). In that matter, the notings were sought to be used for taking an action of contempt. This is criticised by the Court. However, in para 27 the Court had observed that they can be used for a purpose relating to the case involved. We have referred to the notings only for the purpose of finding out as to what happened at the officers' level when there was a conflict of opinion between the State Government on the one hand and MHADA and Repair Board on the other. Mr. Singhvi had also relied upon the judgment of the Apex Court in the case of G.B. Mahajan v. Jalgaon Municipal Council, to submit that if it

was within the powers of a public body to construct a commercial complex, that need not be frowned up. What is however material to note is that in that matter, the criteria for the project was enunciated and thereafter tenders were invited. Five developers had submitted their tenders and then one was selected to carry out the project. It is in that context that the Supreme Court had observed that wide range of policy options not inconsistent with the objectives of the statute should be held permissible. The facts of the present case are quite different.

103. Mr. Singhvi and Mr. Reis had relied upon the doctrine of promissory estoppel and pressed into service the observations of the Apex Court in Express Newspapers Pvt. Ltd. v. Union of India, . In that matter, what had happened was that when earlier Government had permitted the construction of the building of Express Newspapers, but the subsequent Government sought to interfere therewith. In that situation, the Supreme Court held that the Union of India was precluded by the doctrine of promissory estoppel from questioning the authority of the Minister in granting the permission and that the successor Government was clearly bound by the decision taken by the Minister. It is however material to note as to what was observed by the Supreme Court in para 182 of that judgment.

"182. It is not necessary for purposes of this judgment to resolve the apparent conflict between the decision of the Bhagwati, J., in Motilal Padampat Sugar Mills Co. (P) Ltd. v. State of Uttar Pradesh, as to the applicability of the doctrine of

estoppel for preventing the Government from discharging its functions under the law. In public law, the most obvious limitation and doctrine of estoppel is that it cannot be evoked so as to give an overriding power which it does not in law possess. In other words, no estoppel can legitimate action which is ultra vires. Another limitation is that the principle of estoppel does not operate at the level of Government policy. Estoppels have however been allowed to operate against public authority in minor matters of formality where no question of ultra vires arises : Wade, Administrative Law, 5th edition, pp. 233-34)."

104. Mr. Singhvi and Mr. Reis pressed into service the observations Professor Wade quoted with approval in para 177 of this judgment to the effect that a person who by some statement or representation of fact causes another to act to his detriment in reliance or the truth of it is not allowed to deny it later, even though it is wrong. With great respect, we would say that the proposition can not apply to the present facts. As pointed out earlier, the Repair Board had no authority to give the kind of N.O.C. it gave without the approval of the Government. Shreepati Builders clearly knew it from the order passed in A.O. (Stamp) No. 522 of 2001. They knew that the property was acquired by the State and yet gave a false representation in their undertaking along with application which was entertained by the Repair Board against the interest of lawful authority viz. the State Government. They obtained consent letters without giving full information to the tenants and then rushed to construct a transit building when the matter was in Court. They cannot be permitted to capitalise on the basis of their own wrong by taking recourse to promissory estoppel which has no application in these circumstances.

105. Mr. Singhvi had submitted that MHADA and Repair Board ought to be permitted to function independently and any interference with the N.O.C. will lead to impairing their autonomy. As against that, Mr. Janardhanan had drawn our attention to sections 164 to 167, 184 and 185 of the MHAD Act to submit that MHADA and Repair Board are agents of the State created to discharge the statutory functions, subject to the control of the State. We have perused the provisions. Section 164 gives the Government the power to issue directions to MHADA. Under section 165, State can order an inquiry, the Authority or Board can be reconstituted under section 166(2). The rules for their functioning are to be made by the Government. In view of this, although the Government may not interfere in the day-to-day functioning of MHADA or Repair Board, the initial decision with respect to the development of a property acquired by the State, has to come from the State Government. If the Repair Board issues a N.O.C. contrary to Government Policy, the Government can certainly interfere therein.

106. It is interesting to note that subsequent to the acquisition of the property, may be slowly, but over the years MHADA and Repair Board had appointed a contractor, prepared plans and advertisements were given twice for the development of this property. The plans were approved from the Municipal Corporation for constructing tenements of 225 sq. ft. wherein 133 more tenements would become available. The moment Shreepati Builders entered the picture, MHADA and Repair Board have given up the efforts made by their officers over the years. This is also reflected in the notings which are quoted earlier. It is interesting to see that as soon as Shreepati Builders entered into the picture, whatever terms they quoted were accepted. In fact, it is very clear from para 3(o) of Mr. Mohite's petition that when he was trying to organise the occupants, according to him, only good many of them went to Shreepati Builders. In fact, Shreepati Builders also record in their letter of 17th October, 2001 that in a common meeting of the Chairman of the Repair Board Shri Sachinbhau Ahir and the officers of MHADA, Mr. Mohite was asked to collect signatures of 70% and more occupants. Thus this is not a case where 70% people have come together and then chosen their developer. It almost appears to be the other way round. However, once the 70% signatures are obtained, the significance of the signatures was over. They were only worth their signatures or thumb impressions. As Mr. Kiran Shukla, Tated and others point out in their petition, they were given to understand that full information about the project will be given to them after 70% consents are obtained. Thereafter they made repeated requests seeking information, but that was without any effect. When 42 of them withdrew their consent letters, they were threatened by Shreepati Builders with action for damages in their letter dated 25th March, 2001 and even for contempt of Court in letter dated 12th April, 2001 (at Exhibits V and AC to Mr. Mohite's petition). Tated, Shukla and others seek information about plans, maintenance charges in their letter of 30th April, 2001 to the Board also, but no information is forthcoming. On purchasing the property from Vinit Builders. Shreepati Builders call upon occupants to pay rent and threaten legal action. Only at that stage, on being pointed this, the Board intervenes. From the files of MHADA, it was clearly placed by the engineers that the project was at the stage of issuing tenders and the tender from one Jai Construction was already received for the transit building. In clear terms, it is recorded that there are orders of Court and High Court be approached to seek modification. In the proposed scheme, 133 additional tenements would become available and if given up, efforts of 15 years will be wasted. It is also brought to the notice of Chief Officer that it is an acquired property and even for issuing N.O.C. at 2.5 F.S.I., Government's approval will be required. Yet, the Vice-President of MHADA Shri Uttam Khobragade approves the proposal of Smt. Vandana Khular, Chief Officer of the Repair Board to issue the disputed N.O.C. on 27th February, 2001. It is further material to note that prior to issuance of N.O.C., Shreepati Builders write to Repair Board on 19th January 2001 that Mr. Gurunath Dalvi be removed and one Mr. Shah be appointed as architect of the Board and the decision is taken. It is their submission that pending clearance of 4 F.S.I. N.O.C. be given for 2.5 F.S.I. and it is issued inspite of there being a letter of caution dated 10th February, 2001 from the Secretary (Housing) on record. The Secretary (Housing) Shri Buddhiraja received an invitation for Bhumi pujan to be held on 10th February, 2001 and in this letter, he asked: "Please let me know no what terms and conditions this joint venture was agreed to by MHADA and the level at which the approval was accorded". Yet, without seeking a clear approval, the N.O.C. is issued on 27th February, 2001.

Role of Chairman Shri Sachin Ahir and unfair criticism of Shri Chandrashekhar Prabhu and Shri Madhu Chavan

107. It is not surprising therefore that Shreepati Builders are extremely grateful to the Chairman of the Repair Board Shri Ahir, without whose blessings many of the decisions would not have been possible. He is an M.L.A. belonging to Nationality Congress Party. In their letter of 20th September, 2001, Shreepati Builders record how the initial meeting to consider the redevelopment was held at the instance of Sachinbhau Ahir and that on receiving moral support from him they had moved in the matter. The letter asks Mohite and others to thank the Chairman for the keen interest shown. No wonder at his hands the Bhumi Pujan was performed. It is also interesting to see as to how the fair names of two social activities are sought to be tarnished, firstly that of Mr. Chandrashekhar Prabhu, an Architect by education and a Town Planner of standing, and also a former MLA from the very area belonging to the Indian National Congress (I) and who is Advisor to the State Government. Secondly, Mr. Madhu Chavan who belongs to Bhartiya Janata Party and who was former Chairman of the Repair Board, is also sought to be criticised. Both of them belong to different political parties, but both were of the view that this particular scheme cannot be handed over to a private builder. Both of them were sought to be ridiculed and Shri Sachin Ahir is sought to be praised through the petition and its exhibits. On this background, one can not ignore that nothing much is known about Shri Sachin Ahir in the area of social service priors to his election to the State Assembly. If one is to be known by the company one keeps, then what is know about Shri Sachin Ahir is rather adverse because of his close relation with a person who is claimed to be involved in large number of crimes in the Central Bombay area. We cannot but deprecate this attempt to tarnish the fair names of Mr. Prabhu and Mr. Madhu Chavan, who have nothing but the interest of the occupants at their heart as can be seen at least from the stand that they have taken in this matter.

108. It is also relevant to note that the N.O.C issued is quite confusing. In the initial clause, it talks about F.S.I. 2.5 whereas later on it talks about an additional F.S.I. also, if necessary, to accommodate large number of persons. Clause 14 of the N.O.C. speaks of F.S.I. 4 if the Government gives permission and if the land is released from acquisition. When the land is acquired for a public project, it cant' be made over for private benefits. This aspect is already decided in the earlier petition filed by Vinit Builders. Therefore, the Repair Board could not have inserted any such Clause in the N.O.C. Mr. Shukla in his affidavit of 3rd July, 2001 has made a specific averment that this proposed construction consists of a 20 storied tower for the present occupants to be accommodated in 1/3rd area whereas 2/3rd area will be given to the outsiders coming in. He has also alleged that there is a proposal of a swimming pool and there will be heavy charges for car parking for the incoming outsiders. Shreepati Builders themselves have stated that if given F.S.I. 4, they will earn a profit of Rs. 4 crores and given equal return out of it to the Repair Board. It is not possible to accept that all these efforts are being taken by Shreepati Builders to earn a profit of only Rs. 4 crores for giving the equal return to the Repair Board. The calculations given by Mr. Vashi in fact inspire more confidence. That apart, there is no denial of the above averments regarding the nature of the proposed construction made by Mr. Vashi. In fact, it is stated in the letter of Shreepati Builders dated 15th February 2001 that for the time being they are proposing to go ahead with foundation and plans for 4 F.S.I. hoping that it will be granted at a later point of time. In our view, this cannot constitute a basis of the development of this property. The particulars of the scheme are not known. They are not placed before the Court. They were obviously not known to the 70% of the occupants on whose behalf the scheme is supposed to be floated. The clauses of the N.O.C. give a full power to the developer to negotiate the price with the incoming parties. The entire N.O.C. is, for the reasons stated above, completely defective and it is necessary to interfere therewith.

Conduct of the officers of MHADA and Repair Board

109. As seen from the record of this matter. Vice-President of MHADA Shri Uttam Khobragade and the Chief Officer of the Repair Board Smt. Vandana Khular, has been far from satisfactory as against their subordinate officers who have placed the correct facts on record. As far as Smt. Khular is concerned, at least from the noting it is seen that she was somewhat sceptical about the whole proposal and at every stage she sought the approval from Shri Khohbragade. However, as far as Mr. Khobragade is concerned, he has thrown all care to the wind. This is inspite of a clear letter from the Secretary (Housing) Mr. Buddhiraja referred to above, which is on record. The Vice-President of MHADA knew that all throughout N.O.C. was granted by MHADA or the Repair Board after the clearance from the Government. It is clearly recorded on the files of the Repair Board that certain commitment had been made in the earlier Public Interest Litigation, that 133 more tenements would become available in the present scheme and that good number of steps, including calling of tenders for the construction of the transit building, had already been taken. Inspite of this, the Vice-President of MHADA has sought to issue the N.O.C. although the Secretary (Housing) had made every effort to caution and Shreepati Builders have proceeded to conduct the Bhumi Pujan even before the issuance of N.O.C. It is seen from his typed note placed on record that Shri Khobragade felt disturbed on the plight of Pimpalwadi residents. But there is no such feeling for the residents of Transit Camp. As can be seen from the affidavit of Mr. Trivedi, when it comes to the persons staying in transit camp for years, the stand of the Repair Board is that there is sufficient accommodation in transit camp. This is knowing fully well that those premises are not worth staying for long periods. The information from the officers of MHADA and Repair Board was not forthcoming easily and even in this Court, it became available stage by stage. In this background, the Housing Secretary Shri Buddhiraja has to be commended for protecting a correct legal position in quite a difficult situation. It is very interesting to note that within a span of just about 3 months, i.e. from 27th February, 2001 till 25th June, 2001 (when the construction was stopped), they have constructed a transit building. One does not know how the files moves so fast in the offices of the Repair Board and the Municipal Corporation when private builders approach them. On the other hand, when public bodies and other citizens apply, they require months and years for such purposes. One is also not sure about the nature and strength of construction of this transit building. We are of the view that it is time that the State Government takes a serious view of the manner in which the two officers and particularly the Vice-President of MHADA has proceeded in the matter in utter disregard of the legal and factual position and the instructions from the functionaries of the State.

Housing problems and impropriety in granting 4 F.S.I.

110. (a) Mr. Janardhanan has submitted that the Government had not taken the final decision on the joint project at F.S.I. 4. He was fair enough to accept that the Report of the committee under Shri Sukthankar, I.A.S. and former Municipal Commissioner, had opposed construction at 4 F.S.I. This is because every steep vertical rise will lead to extreme pressure on the horizontal services. All facilities like water, electric supply, transportation, fire-fighting etc. will come under severe pressure. This is also because these buildings are supposed to come up in the highly congested are of South Bombay. A time has come for the State Government to examine its policy in this behalf in all seriousness. It is time that they must examine as to how many persons can be properly accommodated in this small city and particularly in the Southern part of it which is already congested, and whether any decision on their part would add to the congestion and misery and suffering of the people. It should not happen that in the garb of doing something for the dislodged people, the builders and those with money benefit and the suffering of the weaker sections continue. Mr. Janardhan had stated that in any case as disclosed in the Housing Secretary's letter dated 10th February, 2001, the F.S.I. over 2.5 would only be available to MHADA for a public purpose and not for sharing with private developer. This decision is quite appropriate, but Government must examine in the first place whether construction beyond F.S.I. 2.5 is desirable. Such a decision ought to be taken only after involving architects, town planners and administrators of repute in the decision making process to seek a report, providing the report to public at large and inviting a debate thereon.

(b) We are also of the view that the Government should examine as to whether the Chairmanship of the organisations like Repair Board and MHADA ought to be retained only with political personalities and particularly like Mr. Sachin Ahir whose role in this matter has been far from satisfactory and in conflict with the State policy. Maharashtra and Mumbai is not short of competent people, particularly those from the areas of town planning, administration and architecture, who ought to be at the helm of affairs in such organisations. It is undoubtedly for the State Government to take its decision and this does not mean that political and social workers cannot occupy these offices, but at the same time if one sees as to what has happened in this matter, it is high time that the Government and the society at large also applies its mind on these aspects and takes proper corrective measures.

111. This city at one time was occupied mainly by fishermen. It came up as a town having a natural port and thereafter a city where the textiles developed. Today in a population of over 10 million residents, more than 50% of the population of this city lives either on the footpaths or in the hutments or in dilapidated buildings. The influx of people in the city is continuing unabated. A position that the Repair Board does not have funds is very convenient to take and under the garb of that, the interest of larger number of people are thrown to wind very easily, forgetting the commitment that the State made when earlier the repair Board Act was passed and subsequently the MHAD Act was passed. It is high time that necessary corrective measures are taken to see to it that public housing of larger number of people and weaker and middle income groups is given more importance than accommodating a few merely because they are in a position to arrange the funds. The predecessor of MHADA, the Maharashtra Housing Board has done a remarkable job by constructing large housing complexes in different parts of the city such as Worli, Bandra, Andheri, Goregaon, Kurla, Vikhroli, just to mention a few areas where lakhs of people have been staying. Power under section 41 has to be utilised for such schemes to provide housing to larger sections of society. At least that is the direction contained in the directive principles. Presently interest rates are low and funds are available for housing projects. Besides, MHADA and Repair Board can't plead financial difficulty particularly in view of the figures given by Mr. Janardhanan.

112. This matter has brought to light the unscrupulous manner in which the developers can procure the consent letters or how the Repair Board can be bureaucratic. In every such scheme, every occupant of the property must get full information about the proposed scheme. He will certainly be told as to how much area he will get, but he must also know as to what will be the nature of the property after the development. In the event, he has to stay in a multi-storied building he must know how much will be the approximate monthly outgoings thereafter. For that purpose, a plan of the proposed construction must be placed in a room of the chawl committee for everybody to see and inquire. The occupants must know as to how many years will be taken for the proposed construction on a rough basis. For explaining all this, a meeting of the occupants must be held by the Repair Board in the presence of the architect and accountant of the Repair Board, minutes must be drawn and then consent must be sought. The right to know can only be meaningful if there is transparency and the Government is committed to it. That being so, we expect and direct the Housing Secretary to issue necessary guidelines and issue a corrigendum to the brochure issued by MHADA within next three months to apply in all future schemes under D.C.R. 33(7). We make it clear that this direction is only with a view to safeguard the rights of the occupants and not to curtail them even when it comes to the existing ongoing schemes.

Conclusion in nutshell and Directions

113. For the reasons stated above and as elaborated earlier, but to put in a nutshell, we hold that the acquisition of land of Pimpalwadi by the State Government is governed by Chapter V of MHAD Act and D.C.R. 33(7) do not apply thereto. D.C.R. 33(7) is a beneficial provision but it applies to cessed properties governed under Chapters VIII and VIII-A, and it cannot be stretched and insisted on properties acquired by Government for its projects, plans and proposals. The instructions given by the State Government in 1984 and Clause (4) of the instructions of 1st July, 1985 also do not govern this acquisition. The property having been acquired by the State for its project cannot be used by the Repair Board for any purpose other than performing its duties and functions. We are in agreement with the proposition canvassed by Mr. Janardhanan, learned Additional Advocate General and as stated by the Apex Court in State of Kerala v. N. Bhaskaran (supra) that once a property is acquired for a purpose, it has to be used for that purpose. Right from 1985, the State Government had made it clear that this is one of the 34 large properties earmarked for rehabilitation of its occupants as well as others in transit camps. It was accordingly acquired thereafter. That commitment was given while repelling the earlier petition of Vinit Builders as well as in public interest Writ Petition No. 1350 of 1988. The State, MHADA and Repair Board are bound by the same. The Development Control Rules are regulatory in nature insofar as development of a property is concerned. They are only supplementary to the statutory mechanism of acquisition and guide the subsequent development. Provisions thereof cannot be pressed into service as a complete substitute for acquisition as well as regulation of construction and by their very nature they are not so.

114. For the reasons stated above, we have no doubt in our mind that N.O.C. dated 27th February, 2001 will have to be quashed and set aside. Accordingly, we allow Writ Petition No. 1288 of 2001 filed by Kiran Shukla and others in terms of prayer Clause (a). As stated earlier, only a formal order has remained to be passed on the chamber summons taken out by Mr. Mohite in Writ Petition No. 1288 of 2001 for joining in it though in fact in a way the prayer for joining had been granted. The same will stand allowed and disposed of with this order. Mr. Vashi may carry out necessary amendment within one week from today. Similarly Chamber Summons No. 171 of 2001 was moved by D.R. Jadhav and others to intervene and support Kiran Shukla and others. That Chamber Summons also sought to join in the petition and sought a hearing. We have heard the Counsel for D.R. Jadhav and others. This chamber summons also stand allowed to the extent of permitting to intervene and thereafter disposed of. Writ Petition No. 1366 of 2001 filed by Mangesh Mohite and others will stand dismissed. The interim order passed therein stands vacated.

115. Having set aside the N.O.C. issued, comes the question as to what should be the next step and what should be the next direction. One transit building has been constructed by Shreepati Builders. They ought to have waited since the petition has been filed in this Court. They could not have proceeded on the strength of the injunction to construct the transit building. Having done that, they have taken the risk. Mr. Janardhanan pointed out to us that they have given a bond indemnifying the Repair Board against all claims and they are not entitled to any compensation. Even so, we would like them to be paid their construction cost. In the circumstances, we direct the State Government to take appropriate decision to develop the property on its own through MHADA or through any contractor chosen after inviting tenders provided the development is as per the plans prepared by MHADA earlier which will give to the tenants of the property appropriate area as per law and 133 tenants of 225 sq.ft. to others also. In either of the circumstances, we direct the Government to evaluate the construction made by Shreepati Builders through Government valuers and release the amount to Shreepati Builders within 3 months after the decision is taken either to develop the property through MHADA or through any outsider developer.

116. The development of this property has got struck up in the intervening period and it is high time that the Government moves at the earliest. It is very apparent that the difficulties faced by the tenants were put to convenient use by the builders. Mangesh Mohite and others have only been unfortunately party to this happening. They are also the suffers. For that matter, their expectations were not unjust in any manner. They expect a quick and good construction and they were apprehensive that the same will not be provided by MHADA. Government should take care of these apprehensions when this new construction comes up. We direct the State Government, MHADA and Repair Board as suggested by Mr. Janardhanan to see to it that this project is completed in two years, i.e. by the end of May 2004. We have desired earlier that guidelines be issued for full information to the occupants of such project. The State is directed to issue them in 3 months. The State shall also decide as to whether Shri Ahir should continue as Chairman of Repair Board and as to what action be taken against Shri Khobragade and Smt. Vandana Khular.

117. As far as Writ Petition No. 1288 of 2001 filed by Kiran Shukla and others is concerned, we direct respondent No. 2 (MHADA), respondent No. 4 (Repair Board) and respondents Nos. 5 to 12 (Shreepati Builders) to pay the costs. The matter required lot of efforts, affidavits and attendance by lawyers on a number of dates. Respondents Nos. 2 and 4 will each pay costs of Rs. 5,000/- whereas respondents Nos. 5 to 12 will pay costs of Rs. 15,000/-. As far as Writ Petition No. 1366 of 2001 filed by Mangesh Mohite and others is concerned, we are of the view that they are also sufferers due to delay in execution of the project. We have dismissed their petition, but we are not awarding any costs. There will not be any order of costs on the two chamber summonses as well.

118. Both the petitions and chamber summonses stand disposed of.

119. These petitions be placed on Board of the concerned Court on 1st August, 2002 only for directions and reporting compliance with respect to the steps taken. Parties to act on the authenticated copy of this order.

120. Before we conclude, we record our appreciation for the valuable assistance recorded by all the Counsel.

121. Mr. Naphade applies for leave to appeal to the Supreme Court. Mr. Reis supports that request. Mr. Janardhanan and Mr. Vashi oppose the request made by Mr. Naphade and Mr. Reis. We have followed the law laid down by the Apex Court and interpreted the Act as it stands. The request for leave to appeal is therefore rejected. Mr. Naphade and Mr. Reis state that in the event, Mangesh Mohite & others and Shreepati Builders move the Apex Court, they will serve and clear notice of 4 days in advance on the State Government and also on Mr. Vashi.

122. Mr. Reis applies for stay of this order. He submits that the injunction granted in the petition of Mangesh Mohite & others be continued for a further period of 8 weeks. The learned Additional Advocate General makes a statement that the further action from the State Government will take at least 2 months. That being so, Shreepati Builders need not be apprehensive of any further action within a period of 2 months.