Morya Homes, A Partnership Firm v. Slum Rehabilitation Authority
2018-07-23
ANUJA PRABHUDESSAI, RANJIT MORE
body2018
DigiLaw.ai
JUDGMENT Ranjit More, J. - By this petition filed under Article 226 of the Constitution of India, the Petitioner is challenging two orders, namely, the order dated 27th April 2017 and 24th November 2016 passed by Respondent No.9 the High Power Committee and Respondent No.3 Secretary, SRA respectively in an Application No. 253 of 2016 and in an Application No. 13(2) of the Maharashtra Slum Areas (Improvement, Clearance & Redevelopment) Act, 1971. By the order dated 24th November 2016, the Secretary, SRA has terminated the Petitioner''s appointment as developer of subject slum rehabilitation scheme. Whereas by the order dated 27th April 2017, the High Power Committee [for short "the HPC"] has confirmed this order. 2. The facts giving rise to this petition, in brief, are as follows : The slum dwellers residing on the plot of bearing CTS No. 328 of village Deonar admeasuring 3916.0 sq. mtrs. formed a co-operative housing society by the name Morya SRA CHS Limited, i.e., Respondent No.7 herein. The land under the slum rehabilitation scheme is owned by the State Government. Respondent No.7 appointed the Petitioner as developer of the said scheme. The Petitioner has submitted proposal of the subject slum rehabilitation scheme to the Slum Rehabilitation Authority [for short "the SRA"] . The said proposal is duly accepted by the SRA on 29th August 2006. The Additional Collector (Encroachment and Removal) and the Competent Authority (Eastern Suburban) has issued certified Annexure-II on 3rd October 2007 of total 218 number of slum dwellers out of which 202 slum dwellers were held eligible. On the basis of certified Annexure-II, SRA approved the said slum rehabilitation scheme and issued Letter of Intent on 11th September 2008 and thereafter revised letter of intent was issued on 28th August 2009. Subsequently, Intimation of Approval was issued on 27th October 2009. The plinth CC was issued on 2nd November 2011 and amended Intimation of Approval for composite building consisting of rehab and sale component is issued on 26th March 2013. Though the scheme was accepted by SRA on 29th August 2006, even after lapse of period of more than 10 years, the Petitioner failed to complete the slum rehabilitation project and also failed to rehabilitate a single eligible slum-dweller and thereby caused inordinate delay in implementation of the said slum rehabilitation scheme.
Though the scheme was accepted by SRA on 29th August 2006, even after lapse of period of more than 10 years, the Petitioner failed to complete the slum rehabilitation project and also failed to rehabilitate a single eligible slum-dweller and thereby caused inordinate delay in implementation of the said slum rehabilitation scheme. Respondent No.7 society therefore convened a general body meeting on 12th June 2016 and terminated the agreement with the Petitioner. Thereafter Respondent No.7-Society filed an application under section 13(2) of the Maharashtra Slum Areas (Improvement, Clearance & Redevelopment) Act, 1971 and requested the SRA to terminate the appointment of Petitioner as developer for further implementation of the subject slum rehabilitation scheme. By the order dated 24th November 2016, the Secretary, SRA terminated the appointment of Petitioner as developer of the slum rehabilitation scheme on the subject plot of land. Respondent No.7-society was given liberty to appoint a new developer of its choice as per law, rules, regulations and prevailing norms and policy of SRA to complete further implementation of the subject slum rehabilitation scheme. The Secretary, SRA also directed the newly appointed developer to re-imburse the actual expenses legally incurred by the Petitioner till the date of order. The above order of the Secretary, SRA was carried in an appeal before the HPC by filing an application bearing Application No.258 of 2016. The said application was, however, dismissed by the HPC by its order dated 27th April 2017. 3. Mr. Sakhare, the learned senior counsel for the Petitioner invited our attention to the various documents annexed to the petition and submitted that the Petitioner was appointed as developer by Respondent No.7 by executing development agreement / supplementary agreement in the year 2006. The Petitioner thereafter obtained various permissions and sanctions from the SRA. He submitted that Respondent No. 8 was appointed by the Petitioner as a contractor by executing a Memorandum of Understanding in the year 2009 and subsequently by the resolution dated 26th December 2009, Respondent No.7 society has approved the said MoU between the Petitioner and Respondent No. 8. Thereafter on 19th August 2010, a tripartite agreement was executed amongst the Petitioner, Respondent No.7 and Respondent No.8. Mr. Sakhare then invited our attention to the Petitioner''s obligations as well as obligations of Respondent No.8.
Thereafter on 19th August 2010, a tripartite agreement was executed amongst the Petitioner, Respondent No.7 and Respondent No.8. Mr. Sakhare then invited our attention to the Petitioner''s obligations as well as obligations of Respondent No.8. He further brought to our notice the minutes of meeting dated 20th February 2013 between the Petitioner, Respondent No.7 and Respondent No.8, the Memorandum of Understanding dated 20th August 2015 between the Petitioner and Respondent No. 8, the joint meeting dated 30th August 2015 between the Petitioner, Respondent No.7 and Respondent No. 8 and pointed out that in the earlier meeting dated 20th February 2013, time to construct rehab component was extended upto 30th September 2016 and by the latter meeting dated 30th August 2015 the extension to construct was granted upto 28th February 2018. 4. Mr. Sakhare then submitted that on 12th June 2016 Respondent No.7-society held the general body meeting. By passing resolution no.3, general body removed the Petitioner as developer of the said scheme on the ground of delay of 10 years and by passing resolution no.4 Respondent no. 8 was appointed as the developer of the said scheme. He submitted that the Petitioner''s removal as developer and appointment of Respondent No.8 as new developer is totally illegal and bad-in-law. He also submitted that Respondent No.7-society could not have appointed new developer till the SRA has approved termination of Petitioner''s appointment as developer. He submitted that at the time of removal of Petitioner as developer, the Petitioner through Respondent No.8 has constructed 16 floors of rehab component building. 5. Mr. Sakhare also contended that the application filed by Respondent No.7 for change of developer was premature and the same ought to have been rejected by Respondent No.3 inasmuch as Respondent No.7-society agreed to extend the time to complete the construction of rehab component building from time to time and at any rate prior to 28th February 2018 Respondent No.7 could neither have terminated the appointment of Petitioner nor could have filed an application for the Petitioner''s removal as developer. 6. Mr. Sakhare further contended that Respondent No.9 HPC has considered the grounds which were outside the scope of show cause notice dated 10th August 2016, whereas the allegations in the said show cause notice against the Petitioner is regarding delay in completion of project. The HPC however went into the issue of non performance on the part of Petitioner.
6. Mr. Sakhare further contended that Respondent No.9 HPC has considered the grounds which were outside the scope of show cause notice dated 10th August 2016, whereas the allegations in the said show cause notice against the Petitioner is regarding delay in completion of project. The HPC however went into the issue of non performance on the part of Petitioner. He pointed out that the order passed by the HPC deserves to be quashed and set aside on the ground that the CEO of SRA was member of the HPC and the order under challenge before the HPC was made by the delegatee of CEO of SRA, i.e., Secretary. He lastly submitted that the petition deserves to be allowed by quashing and setting aside the impugned orders. 7. Mr. Dhakephalkar, the learned senior counsel for Respondent no.7 submitted that the Petitioner without taking permission and without intimating the SRA, in the year 2009 executed MoU with Respondent No.8 which itself shows that the Petitioner has no financial capacity to execute/implement the said slum rehabilitation scheme. He submitted that the Petitioner had given an undertaking on 25th July 2006 that he would obtain necessary permissions and would complete the project within 24 months. However since after the submission of slum rehabilitation scheme on 29th August 2009, the Petitioner not only failed to obtain necessary permissions but also failed to start construction work on the subject slum rehabilitation scheme. Mr. Dhakephalkar submitted that Respondent No.8 has constructed transit camp and also paid compensation towards rent to eligible slum-dwellers who have shifted elsewhere by vacating their respective structures. He submitted that the actual implementation of said scheme is being executed by Respondent No.8 after obtaining commencement certificate on 2nd November 2011. Mr. Dhakephalkar contended that the Petitioner for last 10 years has not bothered to visit the site and even did not meet the committee members or slum dwellers and also has no registered office at Mumbai and is settled in Aurangabad. As per the joint venture agreement, all the applications in respect of subject slum rehabilitation scheme are required to be made by the Petitioner since it [the Petitioner] is on the record of SRA. Respondent No.8 could not construct rehabilitation component building due to the failure and non co-operation on the part of Petitioner.
As per the joint venture agreement, all the applications in respect of subject slum rehabilitation scheme are required to be made by the Petitioner since it [the Petitioner] is on the record of SRA. Respondent No.8 could not construct rehabilitation component building due to the failure and non co-operation on the part of Petitioner. He submitted that the Petitioner failed to pay monthly compensation to the eligible slum dwellers and he has breached terms and conditions of the undertaking dated 25th April 2006. Therefore, the Respondent-society by a resolution passed in general body meeting dated 12th June 2016 unanimously resolved and terminated the appointment of Petitioner as developer of the subject scheme. Before termination of the Petitioner as developer, legal notice was issued to it informing it about the revocation / cancellation of development agreement. Respondent No.7 thereafter made an application to Respondent No. 3 requesting to terminate the Petitioner''s appointment as developer, which application was rightly allowed by Respondent No.3. Mr. Dhakephalkar submitted that pursuant to the order passed by the Secretary, SRA, Respondent No. 7 Society by general body meeting resolution dated 25th December 2016 appointed Respondent No.8 as developer for further implementation of the subject slum rehabilitation scheme. 8. Mr. Thorat, the learned senior counsel appearing on behalf of Respondent no.8 submitted that since inception Petitioner was knowing that it did not have expertise as well as financial capacity for implementation of the subject slum rehabilitation scheme. The Petitioner due to lack of expertise and financial capacity could not take steps despite undertaking dated 25th April 2006. Mr. Thorat submitted that SRA issued LoI on 11th September 2008 and revised the same on 28th August 2009. Thereafter SRA on 19th September 2009 granted permission for construction of transit camp and accordingly Respondent No.8 has constructed transit camp consisting of 144 tenements. Respondent No.8 has also taken effective steps for shifting slum dwellers and has paid to 78 slum dwellers monthly compensation of Rs. 80 lakh. Thus the progress in construction was made only after appointment of Respondent No.8. Mr. Thorat submitted that on account of inter-se disputes between partners of the Petitioner and Anant Kulkarni. one of the partners of Petitioner approached Respondent No.8 to resolve the said dispute. Respondent No.8 resolved the said dispute and paid an amount of Rs. 1,80,60,000/- to those six partners who retired from the said partnership firm. Mr.
Mr. Thorat submitted that on account of inter-se disputes between partners of the Petitioner and Anant Kulkarni. one of the partners of Petitioner approached Respondent No.8 to resolve the said dispute. Respondent No.8 resolved the said dispute and paid an amount of Rs. 1,80,60,000/- to those six partners who retired from the said partnership firm. Mr. Thorat specifically contended that because of failure on the part of the Petitioner to obtain necessary permission, delay was caused in implementation of the scheme and Respondent No.7-society therefore lost faith in the Petitioner-developer and accordingly removed him by passing resolution in the general body meeting which decision is confirmed by the SRA and thereafter the HPC rightly did not interfere with the said decision. Mr. Thorat submitted that during the pendency of appeal / application, the HPC directed Respondent No.8 to give an undertaking that construction of the rehab component building would be completed within the period of one year. This undertaking was given by Respondent No. 8 and within the period stipulated in this undertaking, the entire building consisting of 22 floors is completed. Even the flats in this rehab building are allotted to the eligible slumdwellers. The SRA has already issued the occupation certificate. 9. Mr. Thorat submitted that Respondent No. 8 has spent an amount of more than Rs. 50 crore on this project. He denied that the Petitioner had contributed any amount or incurred expenses in this project. He submitted that since the rehab building is complete, what is remaining is only the settlement of accounts and this Court should not interfere in this petition, however, the Petitioner can approach civil Court for that purpose. 10. Mr. Vijay Patil, the learned counsel appearing on behalf of SRA and HPC supported the impugned orders. He submitted that despite undertaking given in the year 2006 to complete the project within 24 months, the Petitioner failed to do the same though more than 10 years have lapsed. He submitted that impugned order was passed on the ground of default of the Petitioner in executing the project. Though the Petitioner has appointed Respondent No.8 as a co-developer, the same is without approval of the SRA. It is the Petitioner who is to be blamed for the delay in completion of the project and for that purpose he cannot blame Respondent No. 8.
Though the Petitioner has appointed Respondent No.8 as a co-developer, the same is without approval of the SRA. It is the Petitioner who is to be blamed for the delay in completion of the project and for that purpose he cannot blame Respondent No. 8. He lastly submitted that impugned orders are passed taking into consideration all aspects and therefore the same need not be interfered with in exercise of jurisdiction of this Court under Article 226 of the Constitution of India. 11. We have given due consideration to the submissions of the learned senior counsel appearing for the respective parties. We have also gone through the petition along with annexures annexed thereto and reply affidavits filed by the Respondents. 12. Before entering into merits of the contentions of respective parties, we must consider the further developments that have taken place after the impugned order is passed by the HPC and during the pendency of this writ petition. The HPC at the hearing held on 18th March 2017 had given oral direction to Respondent No.8 to file an undertaking specifically undertaking to complete the construction of rehab building on the subject plot within the period of 12 months from the date of receipt of revised LoI. Respondent No.8 as per the said oral direction, filed an undertaking on 28th March 2017 undertaking that it shall complete the construction of rehab building within the period of 12 months from the date of receipt of revised LoI. The reference of the said oral directions is contained in the order dated 27th April 2017. Respondent No.8 thereafter completed the construction of rehab building in all respects before November 2017. This is supported by the photographs at Exhibit-"A" to the additional affidavit filed by Respondent No.8. Respondent No.8 thereafter by letter dated 22nd November 2017 requested the SRA to take necessary steps for allotment of tenements to the eligible slum-dwellers. The Joint Registrar, SRA by his letter dated 12th January 2018 informed Respondent No.8 to submit latest Annexure-II, copy of the sanctioned plans, the seniority list of the slum-dwellers and list of tenements. On 21st February 2018, Respondent No.8 submitted all required details and again requested the Joint Registrar, SRA to take necessary steps for allotment of tenements to the eligible slum-dwellers.
On 21st February 2018, Respondent No.8 submitted all required details and again requested the Joint Registrar, SRA to take necessary steps for allotment of tenements to the eligible slum-dwellers. The designated officer of SRA thereafter issued notice dated 26th March 2018 for allotment of tenements and for that purpose special general body meeting was scheduled on 11th April 2018 at 11.00 a.m. As per the directions of the Joint Registrar and in the presence of the officer of SRA, the allotment of rehab tenements was done on 11th April 2018 and the allotment letters were issued to the respective eligible slumdwellers. Respondent No. 8 applied for the environment clearance for the subject slum rehabilitation project and the same was granted on 3rd April 2018. The architect of Respondent No.8 by the letter dated 10th May 2018 informed the Executive Engineer, SRA that construction of the rehab building , Wing-A in composite building comprising of ground plus 22 floors has been supervised by her and completed to her satisfaction. Subsequently, the architect of Respondent No. 8 on 17th May 2018 made an application to the Executive Engineer of SRA for issuance of occupation certificate. Thereafter on 6th July 2018, the SRA in response to this application, issued full occupation certificate in respect of rehab building. On 29th May 2018, Respondent No.8 informed the Chairman / Secretary of HPC that it has complied with the order passed by the HPC in Application No.253 of 2016. 13. Respondent No.8 has annexed copy of the statements showing the expenditure incurred by it at Exhibit-"K" and "L" to the additional affidavit. Perusal of these documents show that Respondent No.8 has spent an amount of Rs. 41 crore approximately for completion of rehab building A-Wing for accommodating 218 slumdwellers, and in addition to this, Respondent No. 8 has transferred an amount of Rs. 8,64,77,208/- to the Petitioner for various expenses. 14. The interim directions given by the HPC to Respondent No.8 to file an undertaking and complete the construction work within the period of 12 months is not challenged by the Petitioner by filing any proceeding. This interim direction of the HPC has been complied with by Respondent No.8 and as stated above they have completed the construction of entire building consisting of ground plus 22 floors and also obtained the occupation certificate.
This interim direction of the HPC has been complied with by Respondent No.8 and as stated above they have completed the construction of entire building consisting of ground plus 22 floors and also obtained the occupation certificate. Respondent No.8 has also allotted the flats in the newly constructed rehab building to the eligible slum-dwellers. The statements showing that expenses incurred by Respondent No.8 are more than Rs. 50 crore is also not disputed by the Petitioner. 15. Thus, we find that pursuant to the order of SRA, Respondent No.7-society has passed a fresh resolution on 25th December 2016 in general body meeting and unanimously appointed Respondent No.8 as developer for further implementation of the subject slum rehabilitation scheme. Though the Petitioner challenged 3rd respondent''s order before the HPC, Respondent No.8 was permitted to complete the construction of rehab building which as stated above was completed within the stipulated time. The record also reveals that the entire expenses for construction of building is borne by Respondent No.8 and, what remains is now the adjustment of accounts between the Petitioner and Respondent No.8 in terms of the joint venture agreement in between them and that can be done by filing a separate suit as per the liberty granted by the SRA. In our view, since the scope of this writ petition is restricted to termination of the Petitioner''s appointment as developer of the subject scheme, we need not entertain this writ petition in the light of facts stated hereinabove. 16. At this stage, we must also take note of the fact that after the impugned order was passed by the HPC, the present Petitioner has made an application on 23rd June 2017 for encashment of their bank guarantee and has taken refund of Rs. 62,52,615/- from the SRA. Copy of the said application is annexed at Exhibit-"M" to the additional affidavit filed by Respondent No.8. The encashment of bank guarantee by the Petitioner does show that the Petitioner has accepted its termination as developer of Respondent No.7-society for the development of said plot. Considering the fact that Respondent No. 8 has completed the construction and the Petitioner has encashed the bank guarantee, the concurrent orders passed by the authorities below are not required to be interfered with. 17. This takes us to consider the submissions of Mr.
Considering the fact that Respondent No. 8 has completed the construction and the Petitioner has encashed the bank guarantee, the concurrent orders passed by the authorities below are not required to be interfered with. 17. This takes us to consider the submissions of Mr. Sakhare that the Petitioner''s removal and appointment of Respondent No. 8 as new developer is totally illegal, malafide and bad in law. It is true that initial permissions / sanctions in respect of the subject SRA project was taken by the Petitioner from SRA. However, it is borne out by the record that the Petitioner was duty bound to implement and complete the said scheme within 36 months from the date of grant of commencement certificate. Admittedly the commencement certificate was granted on 2nd November 2011. It is also true that the Petitioner gave an undertaking on 25th June 2006 that he will obtain necessary permissions and complete the entire project within 24 months, but for the period of 3 years, i.e., till 2009, the Petitioner could not even start construction, in which year the Petitioner entered into joint venture agreement with Respondent No.8. It is pertinent to note that this agreement between the Petitioner and Respondent No.8 was not brought to the notice of SRA nor the same was approved by SRA. The record further reveals that the steps for implementation of the said project was taken by Respondent No.8. The Petitioner was duty bound to complete the project within three years as per the terms and conditions of commencement certificate. However he failed to do so. The joint venture agreement between the Petitioner and Respondent No.8 makes it abundantly clear that Respondent No.8 was co-developer and not a contractor, as contended by the Petitioner. Respondent No. 8 under this agreement was to construct the transit camp, shift the eligible slum-dwellers to the transit camp, construct rehab component building and sale component building. Under this agreement, the Petitioner was entitled for 40% profit and Respondent No.8 was entitled for 60% in profit. Subsequently, in the year 2015, the Petitioner''s profit was reduced to 30% and Respondent No.8''s profit share was increased to 70% inasmuch as Respondent No.8 made payments to the Petitioner''s partners to resolve the dispute between them. The fact remains that the Petitioner was developer of the subject plot and it was his obligation to complete the project within the stipulated time.
The fact remains that the Petitioner was developer of the subject plot and it was his obligation to complete the project within the stipulated time. Respondent No.8 initially was not approved or recognised by the slum redevelopment authorities. The Petitioner has admitted that there is delay in completing the project, however he blames Respondent No.8 for the same. There is no privity of contract between Respondent No.8 and the SRA. In our view, it was the obligation of the Petitioner to complete the said project within the stipulated time. The record reveals that the Petitioner has not done anything except obtaining initial permission. The lower authorities have concluded that the project could not be completed because the Petitioner has no expertise and financial capacity. We find that the conclusion arrived at by the lower authorities cannot be faulted with. 18. So far as the contention of the Petitioner that Respondent No.8 could not have been appointed as the new developer before approval of Petitioner''s termination is concerned, we find no merit inasmuch as the SRA under the order dated 24th November 2016 granted liberty to Respondent No.7-society to appoint new developer as per their choice and Respondent No.7 by the resolution dated 25th December 2016 unanimously resolved to appoint Respondent No.8 as new developer for further implementation of the subject slum rehabilitation scheme. 19. This takes us to consider the next submission of Mr. Sakhare that the order of HPC deserves to be quashed and set aside on the ground that the CEO of SRA was member of the said HPC. The order is sought to be challenged on the ground that the order impugned before the HPC was passed by the Secretary of SRA under delegated powers of the CEO of SRA. We are not inclined to entertain this objection because though the CEO of SRA was member of the HPC, there were other four members in the said committee. Be that as it may, the Petitioner having submitted to the jurisdiction of the HPC now cannot be permitted to take objection to its jurisdiction for the first time in the High Court. It is settled position in law that objection to the jurisdiction must be taken at the earliest possible.
Be that as it may, the Petitioner having submitted to the jurisdiction of the HPC now cannot be permitted to take objection to its jurisdiction for the first time in the High Court. It is settled position in law that objection to the jurisdiction must be taken at the earliest possible. The Petitioner, in our opinion, ought to have taken this objection at the inception, and if it had any objection should not have participated in the proceeding before HPC. In our opinion, the Petitioner belatedly the Petitioner cannot raise this ground for the first time in the High Court. 20. Before parting with the matter, we must give our consideration to the submissions made by Mr. Sakhare that Respondent No.9- HPC has considered the grounds beyond the scope of show cause notice dated 10th August 2016. At page no. 303 at Exhibit-"E" to the petition, is the Petitioner''s reply to the said show cause notice. In this reply, the Petitioner itself has brought on record the joint venture agreement between itself and Respondent No.8 and the tripartite agreement between itself, Respondent No.7 and Respondent No.8. In this reply to notice, the Petitioner blamed Respondent No.8 for the delay in construction work. The SRA as well as HPC therefore rightly considered the Petitioner''s these allegations and came to the definite conclusion that the Petitioner has no expertise in carrying out the development work and has no financial capacity to carry out the said project. 21. Taking totality of the facts and circumstances of the case into consideration we are of the opinion that the concurrent orders passed by the authorities below are not liable to be interfered with. The writ petition is devoid of any merit and the same is accordingly dismissed.