Northern India Co-Operative Housing Society & Anr. vs Municipal Corporation Of Greater Mumbai & Ors.

Rule. Rule made returnable forthwith by consent of the parties.

The Petitioners in this Writ Petition are questioning the validity of the order dated 13^th January 2016, passed by the Respondent No.4-Deputy Municipal Commissioner (Improvement), cancelling the Agreement to Lease of plot no. 21/ 2, of Sewree-Wadala South Estates, Mumbai thereby terminating the Lease of Petitioners and holding that, the Municipal Corporation is entitled to re-enter the said plot, further recommending that the papers should be placed before the competent authority for appropriate orders.

Petitioner no.1 is the Northern India Hindu and Sikh Co-operative Housing Society, registered under the Maharashtra Co-operative Societies Act, 1960 (‘MCS’ Act, for short) and Petitioner no.2 is the honorary secretary of Petitioner no.1-Society.

The case of the Petitioners is that, the Petitioners were granted Lease of land in respect of plot bearing no. 17 to 21, situated at Sewree-Wadala admeasuring 41,480 sq. yds. for a period of 999 years on 07^th July 1947. The larger property was sub-divided into 50 plots. On 27^th March 1962, the Improvement Committee of Municipal Corporation of Greater Mumbai (‘MCGM’, for short) passed resolution no. 856 deciding to put Petitioner no.1-Society in possession of the plot by removing the unauthorised hutments existing on it. Followed by a resolution on 08^th January 1963, the Improvement Committee of the MCGM decided that, the resolutions passed by it previously needs to be honoured by handing over possession to the intended lessee. On 18^th February 1963, the general body of Respondent no.1-Municipal Corporation approved the resolution of the Improvement Committee and in furtherance thereof, the officer of Respondent No.1-Municipal Corporation addressed a letter dated 06^th February 1995, to the Petitioner’s architect confirming that the larger property is Leased to Petitioner no.1-Society. The Petitioner no.1-Society has issued a share certificate allotting plot no. 21 /2 to one Smt. Premvati Gupta on 21^st February 1998.

All of a sudden, the Respondent no.4 issued a show cause notice dated 29^th January 2008, to the Petitioner no.1-Society calling upon the Petitioner to explain as to why the Petitioner has failed to develop the plot within the period of 18 months from taking possession of the plot as per the Clause No. 2 of the Agreement to Lease. It is alleged that, the Petitioner no.1-Society has failed and neglected to develop the Leased plot for more than 60 years. Simultaneously they were also called upon to make payment of arrears of rent for the period of 1^st April 1999 to 31^st March 2008.

The show-cause notice called upon the Petitioner to explain within period of 15 days from the receipt of the said notice, as to why Agreement to Lease should not be terminated. The Petitioner no.1-Society submitted its reply in response to the show cause notice on 04^th February 2008, pointing out to the Joint Commissioner of the Municipal Corporation that, the possession of Plot No. 21/2 was never handed over to the Petitioner due to the existing encroachments on the said land since many years. This issue was already taken up in the proceedings before the Improvement Committee of MCGM on 27^th March 1962. It was pointed out that, the process of handing over the possession of the plot has yet to be completed therefore, the question of termination of Agreement to Lease for that portion of Plot No. 21 would not arise. The Petitioners have also shown their willingness to develop the said plot if the vacant possession of the encroached portion is handed over to the Petitioners further making it clear that they had the first right and authority to develop the said plot under the Slum Rehabilitation Rules. It was therefore requested that, the Respondent-authority should not create any third-party rights over the said plot without the ‘No Objection Certificate’ (‘NOC’, for short) of the Petitioner no. 1-Society.

After receiving the reply of the Petitioner No.1-Society dated 04^th February 2008, the Respondent No. 1-Corporation called upon the Petitioner no.1-Society to attend a meeting on 06^th September 2008, with the Respondent No.4. On 06^th September 2008, a meeting was convened in the office of MCGM, with all the concern officers and it was decided not to accept the Slum Rehabilitation proposal without the Petitioner’s consent and the show cause notice will not be acted upon.

Thereafter once again, the MCGM sent a reminder to the Petitioner for making the payment of Lease rent due from 01^st April 2009 to 31^st March 2015. On 1^st December 2015, the Petitioner paid the property tax of MCGM in respect of the Lease plot. In the meanwhile, the Petitioner also addressed a letter to the Respondent no.1, requesting not to allow any alteration in Plot No. 21/2 without Petitioner’s (NOC) vide communication dated 09^th October 2014.

On the aforesaid background, when the Petitioner published a public notice inviting bids for developing the Plot No. 21/2 on 03^rd February 2016, they were surprised to receive a communication dated 11^th February 2016, addressed by the Respondent no.3-Assistant Municipal Commissioner, forwarding the order dated 13^th January 2016, passed by the Respondent No.4-Deputy Municipal Commissioner (Improvement) which is impugned in this Writ Petition.

According to the Petitioners, the Deputy Municipal Commissioner, had never given them any opportunity of hearing, inspite of that, an order has been passed for extraneous consideration in favour of M/s. Pragatej Builders and Developers Pvt. Ltd. i.e. Respondent No. 5, who are trying to develop the said property by taking consent of the slum dwellers. It is on this background the Petitioners are approaching this Court by challenging the order dated 13^th January 2016.

The learned Advocate, Mr. Rajiv Narula appearing for the Petitioners would submit that, the Respondent No.1-Corporation has failed to handover the vacant possession of the portion of land forming part of Plot No. 21/2 therefore, the Petitioners were unable to develop the said plot. The ground on which the Agreement to Lease is sought to be cancelled is the Clause No.2 of the Agreement to Lease which provides that, if the lessee fails to develop the plot within a period of 18 months from handing over the possession, the Lease shall get cancelled/terminated. Even though such clause is a part of the Lease Agreement. The fact still remains that, the Improvement Committee of the MCGM in its Resolution No. 856 dated 27^th March 1962, has admitted that there are unauthorised hutments on the suit plot, which are required to be removed without further delay and to handover the possession of the plot to the Petitioner No.1-Society. Similarly in the meeting of the Improvement Committee dated 08^th January 1963, the request of the Petitioner in letter dated 4^th December, 1962 addressed to the corporation requesting to hand over the possession of the plot, was resolved to be forwarded to the Commissioner for decision, in the light of orders passed by the committee.

It is submitted that, the Respondent no.1-Corporation has issued a communication calling upon the Petitioner to pay the arrears of rent of the open land amounting to Rs.9,576/- for a period between 01^st April 1999 to 31^st March 2008 with interest thereon. It is alleged in the notice that, the Petitioners have failed to protect and develop the plot as per Agreement to Lease and also failed to pay the Lease rent, which amounts to breach of terms of condition of Agreement to Lease. Resultantly, calling upon the Petitioner to show cause within 15 days from the said notice, as to why the Agreement to Lease should not be terminated. The Petitioner in response to the said notice dated 29^th January 2008, has submitted a detailed reply opposing the action proposed by the Municipal Corporation, bringing it to the notice of the Respondent no.1-Corporation that, vacant possession of plot no. 21/2 was never handed over to the Petitioners, since it was encroached by slum dwellers for many years. This issue finds support from the record in the form of proceedings of the Improvement Committee of the MCGM dated 27^th March 1962.

It is also brought to the notice of the Municipal Corporation that, inspite of paying rent of the plot up to 31^st March 1999, they have failed to hand over possession of the said plot free from slum dwellers to the Petitioner-Society. It is submitted that since the possession itself was never handed over, there is no question of termination of Lease. The Petitioners have shown their willingness to develop the plot in case they are handed over the vacant possession of the plot allotted to them. At the same time, they have also shown their willingness to issue NOC for the slum development, in view of the Slum Rehabilitation Rules, which gives first right and authority to the owner to develop the plot of land.

Mr. Narula, therefore would submit that, when the possession of the said plot was never handed over to the Petitioner, the question of protecting the plot of land and breach of Clause No. 2 by not developing the plot within 18 months of taking possession does not arise. Ignoring this factual aspect, the Respondent No.1-Municipal Corporation has passed the impugned order for extraneous consideration to favour the Respondent No.6, hence the impugned order deserves to be quashed and set aside.

Per Contra, Mr. N. R. Bubna, the learned Advocate for the Respondent No.1-Municipal Corporation submits that though it is claimed by the Petitioners that the possession land was never handed over to the Petitioners. The document dated 19^th December 1964 issued by the Administrative Officer, (Estates) contains a statement that tentative possession of the aforementioned plot has been handed over to the Petitioners on 15^th December 1964. The other stipulations about the area and the rent to be paid are also mentioned in this communication addressed to the Petitioners. He further submits that, by the very communication, the representative of the Petitioner was also called upon to remain present for the joint survey of the said plot.

Accordingly, the joint survey was conducted on 19^th December 1964 and a certificate of joint survey dated 15^th May 1965 is also placed on record by the Respondent no.1-Corporation. He further contends that, a communication was also issued to the Architect of the Petitioner on 7^th June, 1972, calling upon him to develop the plot as early as possible. A demand was also raised for making payment of the arrears of ground rent. Similar communication was issued on 06^th January 1979, when the Petitioners have failed to develop the plot for, a prolonged duration.

The Respondent–Municipal Corporation has issued a show cause notice to the Petitioner on 29^th January, 2008, calling upon the Petitioners to show cause within 15 days as to why the Agreement to Lease should not be terminated for having committed breach of condition of Agreement to Lease by failing to protect and develop the Leased plot within a period of 18 months from the date of taking possession. After taking into consideration the explanation given by the Petitioners the Deputy Municipal Commissioner has passed an order on 13^th January, 2016, thereby terminating the Agreement to Lease of Plot No. 21/2 at Sewree-Wadala, Mumbai. It is thus submitted that there are no procedural irregularities in the order passed by the Respondent–Municipal Corporation. The Petitioners have failed to develop the plot for more than sixty years, after it is allotted to the them, which constrained the Respondents to take consequential steps. Thus, in view of the aforementioned background, the order passed by the Deputy Commissioner of Municipal Corporation (I) dated 13^th January, 2016, does not deserve any interference.

The Respondent No. 6 i.e. the Sai Aadarsh Co-operative Housing Society, which is the proposed co-operative housing society of the slum dwellers has also opposed the prayers of the Petitioner. In the reply affidavit filed by the Respondent No. 6, it is stated that Plot No. 21/2 at Sewree, Wadala is owned by Respondent No.1–MCGM, which is occupied by 45 occupants and their families who are residing on the said plot since last more than 30 to 40 years. It is their contention that neither Respondent No. 1 nor competent authority (SRA) had provided any basic amenities to the 45 occupants. The suit plot is censused slum on record of Respondent No.1. The Respondent No. 6–Society passed resolution and decided to redevelop suit plot in accordance with the provisions of Slum Act and Regulation 33 (10) of DCR 1991. The Respondent No.6 society appointed Respondent No.5 as their developer and accordingly entered into a development agreement with Respondent No.5. They have also executed irrevocable Power of Attorney in favour of Directors of Respondent No. 5. More than 70 percent of the occupants had given their written irrevocable consent to Respondent No. 5 for proper and speedy implementation of the scheme.

It is submitted that, the Respondent No.5 was called upon to pay Rs.1,93,14,087/- out of which, Respondent No.5 has paid Rs. 77,25,635/- towards the premium. Since the Respondent No. 5 has complied with all the conditions, the Assistant Municipal Commissioner F/North ward of MCGM issued Annexure–II vide communication dated 30^th April 2016. The competent authority has certified that, out of 45 structures, 42 are eligible and all have given their irrevocable consent to the Slum Scheme. It is submitted that since the Petitioners have failed to comply with the terms of Lease, the Respondent No.4 after hearing the Petitioner has passed order on 13^th January 2016, cancelling the Agreement to Lease. According to the Respondent No.6, they have a better claim over the suit land in view of Slum Rehabilitation Act, and Development Control Regulation 33(10) of Greater Mumbai 1991. There being no merit in the claim of the Petitioner, the Writ Petition deserves to be dismissed.

After hearing the respective parties at length, following questions arise for consideration of this Court for deciding the Writ Petition:

The controversy in the Writ Petition revolves around handing over the vacant possession of the Leased land to the Petitioners by the Respondent Nos.1 to 4. The Petitioners have relied on the extracts of the meetings of Improvement Committee dated 27^th March 1962, 08^th January 1963, and 18^th February 1963 to contend that the extracts of proceedings establishes that the possession was never handed over to the Petitioners. It was therefore resolved in the meetings of Improvement Committee to hand over possession of the plot after removing the unauthorized hutments. The aforementioned Resolutions are not disputed. However, Mr. Bubna, the counsel for Municipal Corporation has placed on record a document dated 19^th December, 1964, issued subsequent to the aforementioned Resolutions issued by the Administrative Officer, which reflects that, tentative possession of the plot has been handed over to the Petitioners on 15^th December, 1964 itself. The Petitioners were called upon to remain present for the joint survey to be conducted on 21^st December, 1964. A certificate dated 15^th May, 1965 of joint survey in respect of measurement of the said plot is also placed on record which supports the stand of MCGM, that possession of the Plot No.21/2 has been handed over the Petitioner.

Our attention has been invited to the communications dated 8^th February, 1972 and 27^th March, 1972, issued by the Ward Officer (Estate) addressed to the Architect of the Petitioner, calling upon them to develop the said plot. In response to which, the Petitioners’ have informed the Ward Officer through their Architect that the construction of the building on the aforementioned site could not commence due to existence of unathorized hutments, which they are trying to remove. A further request is made to extend the period for commencing the construction, to which approval was granted on 26^th May, 1972. Thereafter, again the Architects of the Petitioners were called upon to commence the development work as early as possible vide communications dated on 8^th June, 1972 and 6^th January, 1979. It appears that the Petitioners have failed to take steps even after the extended period of two years was over. Therefore, a show cause notice has been issued to the Petitioners on 29^th January, 2008, for cancellation of the Agreement to Lease for having committed breach of the condition of Lease by failing to develop the plot within a period of 18 months, and for having failed to protect their Leasehold rights from encroachments. In this very communication, the Petitioners have been reminded that they are aware about formation of Co-operative Housing Society by the Respondent No.6 for redevelopment of the said plot under Regulation 33(10) of DCR 1991. In view of the aforesaid development and also on account of failure by the Petitioners to pay the rent from 1^st April, 1999, the Petitioners have been issued a show cause notice for having committed breach of conditions of Lease.

The Petitioners have responded to the show cause notice for termination of agreement, opposing it on the ground that, the possession of the plot was never handed over to the Petitioners, therefore, the question of failure to protect the plot from encroachments and also failure to develop does not arise. Although the Petitioners have asserted their first right and authority to develop the said plot, a document dated 30^th April, 2016, addressed to the Deputy Collector, SRA, by the competent Authority and Assistant Commissioner discloses that the letter for issuing Annexure–II was received by the Municipal Corporation on 31^st December, 2006. Draft of Annexure–II was published on 20^th July, 2010. Amongst the 45 slum dwellers, 42 qualified as per the norms in the Government Resolution dated 11^th July, 2001. Thus, the process of slum rehabilitation of the encroachers was already initiated in the year 2006 itself, which was within the knowledge of the Petitioners, they have not taken any steps for asserting their rights.

In the meanwhile, the preparation of rehabilitation scheme was already under progress and valuable rights have accrued in favour of Respondent No.6. Even though, the Petitioners have asserted their first right and authority to develop the plot, in their reply to the show cause notice on 4^th February, 2008, the Petitioners have not taken any positive steps thereafter by submitting any scheme to the Slum Rehabilitation Authority or the Municipal Corporation.

Although it is the stand of the Petitioners that since vacant possession of the Plot No.21/2 has never handed over to them, a communication of the Petitioners themselves addressed to the Assistant Commissioner (Estate) Department dated 7^th October, 2014, acknowledges that initially the suit plot was allotted to late Smt. Premavati G. Gupta, who died on 9^th January, 2001, after which, the Petitioners have resumed possession, after following due process of law and intend to redevelop the said plot, as per prevailing development policy. Thus, it is evident from this communication that, the Petitioners acknowledge to have resumed possession of the suit plot, which falsifies their own stand about vacant possession of land was never handed over to them.

The impugned communication dated 13^th January, 2016, reveals that the Deputy Municipal Commissioner (Improvement) has taken into account the response given by the Petitioners to the show cause notice issued to them. The termination of Lease is primarily on two grounds; first on account of failure to develop the said plot within 18 months of taking possession, and second, due to failure to protect the plot from encroachers which amounted to breach of conditions of Agreement to Lease.

So far as first ground is concerned, we have already held that tentative possession was handed over on 15^th December, 1964 itself. Even after two years extension has been granted to the Petitioners for development, they have failed to carry out development on the suit plot. Even after the said period of two years is over, no attempts are made by the Petitioners for development of the said plot, nor any attempts are made for removal of encroachment on the said plot. In the meanwhile the members of Respondent No.6, who are in settled possession have formed Co-operative Housing Society and filed a proposal for rehabilitation scheme. Inspite of being aware about this development, Petitioners have failed to take any positive steps for asserting their rights. Hence, in our view, the Petitioners have failed to satisfy that, possession was never handed to them. In fact, some documents on record establish that possession was in fact handed over to them. Hence, we hold that, on failure of the Petitioners to develop the plot, the action of cancellation of Lease is rightly initiated by the Respondent–Corporation.

Due to the negligence and lethargic approach of the Petitioners, substantive statutory rights have accrued in favour of Respondent No.6, which cannot be denied. The Respondent No.6 in exercise of their statutory rights have moved a proposal for their rehabilitation on the suit land, which is at an advanced stage.

The impugned order also refers to the circular dated 16^th May, 2012 and 10^th September, 2015, which provides guidelines for processing of proposal for allotment of MCGM Plot to various SRA Schemes in Mumbai. The circular dated 16^th May, 2012, required issuance of show cause notice to the lessee of the land owned by the Municipal Corporation. In case of failure of the lessee to protect the land from the encroachers, it empowers the Assistant Commissioner of the MCGM to pass appropriate orders after receiving reply of the lessee, for seeking sanction of improvement committee to delete the area of encroached land from the purview of earlier ICR/CR. Since this procedure prescribed in Circular dated 16^th May, 2012 appeared was causing delay in the SRA Scheme, the said condition requiring to issue of show cause notice to the lessee has been done away with in a subsequent circular dated 10^th September, 2015, permitting issuance of Annexure–II, and issuance of IOA before termination of Agreement to Lease. In view thereof, the Competent Authority has taken further steps in respect of the proposal of the Respondent No.6 for issuing Annexure–II and has simultaneously passed the impugned order, terminating the Agreement to Lease.

The rights of the slum dwellers are protected by enacting Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971. This enactment is aimed at protecting fundamental right of shelter and the basic amenities of the slum dwellers, by enabling them to live a dignified life. Right to life guaranteed under Article 21 of the Constitution of India includes right to shelter, it ensures a life lived with dignity, which is not possible without adequate housing. Regulation 33(10) of DCR 1991 provides for eligibility of the slum dwellers for the redevelopment schemes. Appendix–IV of the DCR, Greater Bombay 1991, regulates the applicability of the scheme, right of hutment dwellers and other related issues. Clause 1.12 of the Appendix–IV, reads thus:

Bare reading of the aforementioned clause, it leaves no doubt about its interpretation, which provides that, wherever the vacant Leased land is encroached by the slum dwellers, the Lease created by Municipal Corporation shall stand automatically terminated, as soon as a Slum Rehabilitation Scheme is prepared and submitted for approval of the Slum Rehabilitation Authority. Thus, looking at the beneficial object i.e. the public purpose for which the regulations and Circulars have been issued for removing the difficulties in processing the SRA Schemes, the Deputy Municipal Commissioner has rightly passed the impugned order resorting to the Circular issued regulating the Slum Redevelopment proposal, resultantly cancelling the Agreement to Lease of Plot No.21/2 of Sewree, Wadala, South, Mumbai.

The ‘No Objection’ is also issued by the Technical Committee on 10.02.2015 and even the Developer has deposited an amount of Rs.77,25,635/- with the Respondent MCGM on 23^rd December, 2015. Similarly, Respondent Municipal Corporation in their affidavit has categorically stated that, NOC to issue Annexure–II has already been issued on 8^th February, 2016 and accordingly Annexure–II was issued on 30^th April, 2016. It is also stated that the draft letter to the Municipal Secretary was also under process, but, due to filing of the present Writ Petition and the interim relief granted vide order dated 7^th July, 2016, no further steps could be taken.

In view of the conspectus of the matter, considering that the proposal of the SRA Scheme is at an advance stage, the developer has already deposited huge amount in the year 2015, itself, the progress of the scheme is stalled only on account of the pendency of the present Writ Petition, due to which the members of the Respondent No.1 Society are deprived on their fundamental right to shelter, recognized by special enactment. Thus, in our view, it would be inappropriate to further deprive the Respondent No. 6 from the benefits under the SRA Scheme.

When we compare the rights of the Petitioners with the rights of members of the Respondent No.6, we find that the balance tilts in favour of members of the Respondent No. 6. The Petitioners themselves have stated that, they have developed 90% of the total land Leased to them. Encroached portion is much smaller portion, as compared to developed land.

In our opinion, the Petitioners have failed to satisfy this Court about the reason for their failure to develop the suit plot for over a period of 60 years, which amounts to breach of Lease conditions. Therefore, the impugned order dated 13^th January, 2016, issued by Respondent No. 4–Deputy Municipal Commissioner (Improvement), MCGM, Mumbai, does not deserve any interference, and the Writ Petition stands rejected. Consequently, the Interim relief granted vide order dated 7^th July, 2016 stands vacated.

Rule is discharged.

On the pronouncement of the judgment, the learned Advocate for the Petitioner requests that the interim relief be continued for a further period of four weeks. We do not find any reason to continue the interim relief. Hence the request is rejected.