SUPREME COURT HOLDS THAT PRIVATE AGREEMENTS / SETTLEMENTS BETWEEN PARTIES THAT ARE CONTRARY TO THE PROVISIONS OF A GOVERNMENT SCHEME, CANNOT BE UPHELD

A Two Judge Bench of the Supreme Court comprising of Justice Aniruddha Bose, and Sudhanshu Dhulia passed a Judgment dated 15.12.2023 in a recent case of Sayunkta Sangarsh Samiti and Anr. Vs The State Of Maharashtra and Ors.  Civil Appeal No. 1359 of 2023 and observed that the Court cannot take into consideration any private agreement reached by the parties over and above the statutory provisions of a law or Government scheme, etc.

Facts

i) In the present case, the Respondent No. 2, Slum Rehabilitation Authority, Maharashtra (SRA) proposed a Slum Rehabilitation Scheme in respect of the slum at CS No. 1 of Lower Parel Division at J.R. Boricha Marg, Mumbai. A total of 75854.716 square metres, or nine structures, were being constructed into houses for the rehabilitation of slum inhabitants. The Rehabilitation Scheme was intended to house 1765 slum dwellers. Nine towers, designated as Tower Nos. A to I, comprised of 69 commercial tenements, 24 recreational tenements, 6 pre-existing amenities, 19 welfare centres, 19 balwadis, and 19 society offices. Three of these buildings—Towers A, B, and C—were completed when the Project began, and approximately 473 slum residents were provided housing  ownership of the tenements through a permanent alternative arrangement.

ii) A society known as the “Shramik Ekta Co-Operative Housing Federation” (Federation), the Respondent No. 6 herein was established by a majority of the slum inhabitants who had previously been split up into several distinct societies. Lokhandwala Kataria Constructions (Developer), the Respondent No. 5 herein was designated as its Developer by the Federation. As a result, SRA issued a Letter of Intent (LoI) dated 16.04.2005 to the Developer, thereby, approving the Slum Rehabilitation Scheme.

iii) Although the construction of nine towers was planned, however the Project was put on hold in 2007. A minority of the slum dwellers, known as “Sayunkta Sangharsh Samiti”, the Appellants herein, established their own unique minority society and became members of the Federation.

iv) The SRA issued Guidelines for the Implementation of Slum Rehabilitation Schemes in Greater Mumbai in September 1997, which provide a summary of the process for implementing Slum Rehabilitation Scheme, which stipulated that: a cooperative housing society comprising of all eligible hutment-dwellers shall be formed by a resolution stating that 70% or more of the eligible hutment-dwellers in a slum or pavement in a viable stretch at one place demonstrate their willingness to join the Slum Rehabilitation Scheme.

v) The Developer, without impleading the SRA, filed a Civil Suit bearing Suit No.1341 of 2007 before the City Civil Court at Mumbai (Trial Court), against the Defendants.1 to 16 who were not letting the Developer to construct the nine towers which had to be completed within a stipulated time. Thus, the Developer sought for an injunction against the Defendants 1 to 15 who were inhabitants of the Slum and the Defendant No. 16, which was the Federation.

vi) During the pendency of the Civil Suit, a Memorandum of Understanding (MoU) dated 23.06.2009 was signed between the Developer, the Appellant-Society, and the contesting Defendants, whereby, it was agreed by the Parties to resolve their differences in terms of the MoU. The Appellant-Society was registered under the Societies Registration Act, 1860, which was also proposed to be registered as a Charitable Trust under the Bombay Public Trust Act, 1950, and declared that it had 770 hutments dwellers as its members.

vii) As per the MoU, only members of the Appellant Society were occupying the Towers D, E, and F that were built under their supervision.

viii) Thereafter, the Developer wrote to the SRA on 05.10.2009 stating that the problems they were facing from Appellants’ end in the Rehabilitation Scheme, were resolved by amicable settlement between the Parties, in terms of MoU and the same was filed in Civil Suit No.1341 of 2007.

ix) The Appellant Society approached the SRA to do the allotment as per the terms of settlement in MoU. However, the SRA decided, vide Order dated 21.09.2020, to allot 712 flats on Tower D, E and F, on the basis of lottery and not on the basis of the MOU terms.

x) Aggrieved by the Order of the SRA dated 21.09.2020, the Appellant Society filed a Writ Petition bearing No. WPL-4168-2020 before the High Court Judicature at Bombay (High Court).

xi) The High Court disposed off the Writ Petition filed by the Appellant Society, vide Order dated 09.10.2020, thereby directing SRA to take a call on allotments of these flats in Tower D, E and F, by way of lottery, as the SRA is the final authority for implementing a slum rehabilitation scheme

xii) Thereafter, the SRA passed an Order dated 26.10.2020 in compliance with the High Court Order dated 09.10.2020 to allot the flats in Tower D, E and F as per the procedure prescribed vide Circular No. 162 dated 23.10.2015.

xiii) Aggrieved by the Order of the SRA dated on 26.10.2020, the Appellant Society filed another Writ Petition bearing No. WPL-8391-2020 before the High Court with a prayer to set aside the said SRA Order dated 26.10.2020.

xiv) The High Court, vide Order dated 22.10.2021, dismissed the Writ Petition filed by the Appellant Society.

Supreme Court Analysis

Aggrieved by the High Court Order dated 22.10.2021, the Appellant filed Civil Appeal No. 1359 of 2023 before the Hon’ble Supreme Court. The Apex Court passed a Judgment dated 15.12.2023 and made the following observations:

1) That the MoU was purely a private arrangement made between the Developer and the minority members of the hutment dwellers i.e. the Appellant Society, which has no basis in law.

2) That the Appellant Society failed to provide any provision of law that supported and recognised a minority society. Moreover, the said Society was not even included in Rehabilitation Scheme.

3) That after implementation of the proposal of the Slum Rehabilitation Scheme, the Developer subsequently issued the LoI dated 16.04.2005. Clause 42 of the said LoI states as follows:

‘42. That the allotment of rehabilitation tenements to the eligible slum dwellers in the scheme, shall be made by drawing lots in presence of the representative of the Asst. Registrar of societies (SRA) and statement of rehab tenements allotted to the eligible slum families in the rehabilitation building with corresponding tenements No. in rehab composite building and Sr. No. in Annexure-II etc. duly certified by the concerned society of slum dwellers and Asst. Registrar (SRA) shall be submitted before requesting for occupation permission to the rehab. tenements.’

4) That there is no legal provision that permits the conditions of the settlement reached by two private parties to be approved and adhered to, in disregard of the statutory procedure specified in Circular No. 162, dated 23.10.2015.

5) That in Lokhandwala Infrastructure Pvt. Ltd. and Another v. State of Maharashtra and others 2011 SCC OnLine Bom 118, the Bombay High Court held that private agreements cannot be enforced in slum rehabilitation schemes, as it would be against the statutory mandate of SRA.

6) Under the Maharashtra Slum Areas Act, 1971 (Improvement, Clearance and Redevelopment), the SRA is the final authority for implementing a slum rehabilitation scheme.

7) That in Smt. Usha Dhondiram Khairnar and Others v. State of Maharashtra and Others 2016 SCC OnLine Bom 11505, the Bombay High Court held that slum society or a private developer cannot dictate terms to the SRA and SRA must act in terms of its own policies and circulars.

8) In the present case, the Appellant Society had not challenged the validity of Circular No. 162, but only sought to implement its private contractual rights over and above the statutory provisions, which is not permissible.

Conclusion

Thus, based on the aforesaid observations, the Supreme Court held that the SRA has the authority to carry out the allotment of flats in accordance with law.  As a result the Appeal filed by the Appellant Society was dismissed and the High Court Order dated 22.10.2021 was upheld.

K. Suneel Kumar Jaiswal

Associate

The Indian Lawyer