Lakhani Housing Corporation Pvt. Ltd vs The State Of Maharasthra

2025 INSC 489 Non-Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal No……….. of 2025 (@ Special Leave Petition (C) No.29118 of 2024)

LAKHANI HOUSING CORPORATION PVT. LTD. & ANR. APPELLANT(S) VERSUS THE STATE OF MAHARASTHRA & ORS. RESPONDENT(S) JUDGEMENT

K. VINOD CHANDRAN, J.

1. Leave granted.

2. Whether the e-tender issued by the Maharashtra

Housing and Area Development Authority1 in pursuance

of a Cabinet decision, followed up with a government

resolution, interferes with the contractual rights of the

appellants is the question arising in the present appeal.

Signature Not Verified Digitally signed by Jayant Kumar Arora Date: 2025.04.16 16:30:55 IST Reason: 1 MHADA

Page 1 of 18 Civil Appeal @ SLP (C) No.29118 of 2024

3. In a writ petition filed by the appellants before the

High Court of Bombay, initially, stay was granted on the

fundamental question of jurisdiction of MHADA to

proceed with a cluster redevelopment in a land having

an extent of approximately 11.20 acres, commonly

known as ‘Guru Tegh Bahadur Nagar’ (subject land,

herein after) which is not owned by the State and lies as

a free hold. The Division Bench of the High Court finally

dismissed the writ petition which judgment is impugned

in the present appeal.

4. On the undisputed facts, the High Court of Bombay

noticed that the land once had 25 buildings standing on

it, housing around 1200 families, the allotment having

been originally made to the refugees from Pakistan. The

buildings were 62 to 66 years’ old, standing in an

extremely dilapidated condition; classified as Category

C-1 by the Brihanmumbai Municipal Corporation2, which

stood demolished in the year 2019 after proper notices

were issued and proceedings taken under the BMC Act.

2 The BMC

Page 2 of 18 Civil Appeal @ SLP (C) No.29118 of 2024

5. The appellants had approached the residents in the

said building for redevelopment of the land and as per

their claim, obtained agreements for redevelopment

from individual members. The appellants had also spent

around Rs.17.31 Crores in pursuing the initial steps for

redevelopment. However, the redevelopment project

did not fructify, according to the appellants, since the

residents did not have proper title deeds despite Sanads

being executed in their favour, between 1954 and 1987.

It was the appellants who took steps to ensure proper

conveyances, executed by the President of India, to be

issued in favour of the families; the absence of which was

the only reason for the development of land having not

been taken up. It was contended that the MHADA could

not have intervened with an e-tender based on the

government resolutions; the Government having no

rights over the land since the property was privately

owned and did not belong to the State.

6. The High Court found that the writ petition is not

maintainable, since, if at all, the recourse of the

Page 3 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 petitioner was against the individuals who were the

residents in the buildings demolished, with whom they

had agreements. It was also found that the agreements

claimed to have been executed by the individual

residents were not registered and that, in any case, it

would have to be established before a Civil Court. The

Government decision to entrust MHADA with the

development, eventually was on the request made by

the majority of the residents who agreed to the

development through the government nodal agency.

The petitioners claimed an expenditure of Rs.17 Crores

out of which Rs.9.35 Crores, expended as corpus funds

to various occupants. On an examination of the

development agreement, it was found that this would

only indicate that the corpus fund was disbursed to only

267 occupants while the total residents came to 1200. The

High Court found that the intention of the petitioner was

to mislead the Court, with half-truths, partial truths and

deliberate falsehood, that too in a writ petition which was

not maintainable . The writ petition stood dismissed.

Page 4 of 18 Civil Appeal @ SLP (C) No.29118 of 2024

7. Before us, Mr. C. A. Sundaram, the learned Senior

Counsel appearing for the appellant pointed out that the

nature of lands subjected to development are

categorised as free-hold, government owned properties

and slums which fall under the Slum Regulatory Authority

and MHADA. Regulation 33(9) of the Development

Control and Promotion Regulations, 20343 deals with the

development of such lands and in so far as privately

owned lands, when the majority of the residents enter

into a development agreement with a private developer,

there cannot be a subsequent intervention by MHADA

by floating a tender to develop the very same property

on which there is an existing contract for redevelopment

with a private developer; in the present case, the

appellants herein. The majority of the residents as also

the Societies had agreed to such development in

pursuance of which considerable amounts have been

spent by the developer and the conveyances facilitated

to the residents, at the instance of the developer. The

3 The DCPR

Page 5 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 entire problem arose when an MLA wrote to the

Government regarding the development of the subject

land, which led to the Cabinet decision and the

government resolution.

8. The Government also proceeded on the wrong

assumption that the subject land belongs to the

Government and, hence, MHADA could be authorised to

carry out the redevelopment as per Regulation 33 (9) of

the DCPR. The residents and the Societies, who had

entered into development agreements with the

appellants had first objected to it, but a volte-face was

made for reasons best known to them. Presumably, on

governmental influence and coercion, with the residents

agreeing to the development by MHADA. It is

vehemently argued that this goes against the consents

issued by almost 909 out of 1200 occupants to the

appellants herein. Mr. Sundaram pointed out that the

new e-tender issued by the MHADA indicates that it is

offering 635 sq. feet of built-up area to the residents,

while the original agreement with the appellants was for

Page 6 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 providing 550 sq. feet. It is undertaken that the

appellants would provide the very same area as

promised by MHADA i.e., 635 sq. feet despite an

agreement to the contrary and this could allay any

apprehension on the part of the residents.

9. Mr. Tushar Mehta, learned Solicitor General

appearing for the MHADA submitted that no reliance can

be placed on the unregistered agreements with

individuals. MHADA is constituted and committed to

prepare, execute, proposals, plans and projects for

housing accommodation, clearances and

redevelopment of slums in urban areas by demolition of

dangerous and dilapidated buildings and their

redevelopment through the statutory boards in terms of

the MHADA Act, 1976. It is pointed out that even

Regulation 33 (9) of the DCPR provides for the private

land holders to enter into an agreement with MHADA and

authorise development of their land at the instance of

MHADA. It is only considering the requirement for

redeveloping the subject land, where the residents were

Page 7 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 evicted as early as in the year 2019 and buildings

demolished that the Government proposes to take over

the development through its nodal agency. The mere

fact that the resolutions were taken on the basis that it is

a government land would not affect the project at all,

even if actually it is a free hold land.

10. The MHADA is authorised under Regulation 33(9)

to intervene and facilitate redevelopment within a free

hold land where the occupants consent to the same. The

Maharashtra Regional and Town Planning Act, 1966,

requires for such redevelopment, with consent of at least

50 % of the occupants in a building and 60 % of the

cluster which is sought to be redeveloped. The

appellants, who claim to have development agreements

with the individual residents, have done pretty little in

the last few years. The evicted residents are out on the

streets and neither has the corpus fund, as agreed,

disbursed to them nor have they been given transit

accommodation or the rent as agreed upon. It is looking

at the plight of more than ten thousand individuals

Page 8 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 comprised in the 1200 families which were evicted from

the buildings, which had to be demolished, with

government intervention, MHADA was authorised to

take over the redevelopment; which is also in public

interest.

11. Mr. Shyam Divan, learned Senior Counsel

appearing for the 17 out of the 25 societies, reiterated

that the residents who are the members of the Societies

are left to fend for themselves without the appellant

having complied with any of the terms of the agreement,

which in any way, have not been validly executed and

does not subsist as of now. The appellant having not

taken any legal steps to enforce their alleged rights

under the agreement and are now indirectly attempting

to thwart the redevelopment, as initiated by MHADA

through a writ petition filed under Article 226 of the

Constitution of India. The attempt is to by-pass the civil

remedy and indirectly stall the e-tender and the

redevelopment of the subject land and, thus attempting

to coerce the residents to fall back upon the appellants.

Page 9 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 The other Societies represented by learned Counsel

supported the arguments of the learned Senior Counsel

and pointed out that the governmental intervention was

not by reason of a communication of the MLA; but 716 flat

owners had already written a letter to the Housing

Minister of the Government of Maharashtra on

05.09.2022, seeking intervention, long before the letter

of the MLA dated 10.01.2023.

12. The thrust of the arguments of the appellant is on

Regulation 33(9), the various categories of Cluster

Development Schemes (CDS) contemplated by the said

regulation and the nature of the agreements entered with

the appellant as a private developer. Regulation 33(9)

has been extracted in the impugned judgment and

hence, suffice it to notice that the redevelopment, as

envisaged by the DCPR, is by three modes, (i)

undertaken by MHADA or the MCGM either by

themselves or through a suitable agency, (ii)

MHADA/MCGM, jointly with land owners and/or

Cooperative Housing Societies of tenants/occupiers of

Page 10 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 buildings and/or Cooperative Housing Societies of

hutment dwellers and; (iii) where the land owners

and/or Cooperative Housing Societies independently,

by themselves carry out such development, or makes the

development through a promoter/developer.

13. As far as the first category is concerned, the

MHADA or the MCGM either by themselves or through

an agency carries out the development, presumably, on

government lands, with which we are not concerned.

Indisputably, though the government resolution speaks

of the subject land being owned by the government, it is

a free hold land on which Sanads were obtained by the

residents and later, proper conveyances were issued. In

so far as the private lands are concerned, Regulation 33

(9) specifies that development on such lands can be

either be carried out by the land owners or cooperative

housing societies themselves or through a promoter or

developer or even jointly with MHADA/MCGM. Hence,

it cannot for a moment be said that on private lands,

MHADA cannot at all enter and carry out a development.

Page 11 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 The CDS, as envisaged under the DCPR specifically

provides for the land owners or the housing societies to

jointly carry out a development on free hold lands and in

that circumstances, the e-tender issued by MHADA can

neither be faulted nor can MHADA’s initiative be termed

as without jurisdiction. As of now, the housing societies

and the residents of 25 buildings who are respondents

herein unanimously support the redevelopment initiated

by MHADA.

14. The initiative was entrusted to MHADA by the

Government, as submitted by the respondents not

merely by reason of the letter written by the MLA but

also in furtherance of a communication issued by around

716 flat owners, pointing out their travails to the Housing

Minister, Government of Maharashtra by letter dated

05.09.2022. Even otherwise, the MLA as is seen from the

communication dated 10.01.2023, produced as

Annexure A in IA No.291091 of 2024, only brought to the

notice of the Deputy Chief Minister of the State, the

difficulties faced by the constituents of his constituency;

Page 12 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 in which exists, the Guru Teg Bahadur Nagar, which

cannot be termed to be with any ulterior motive. The

government resolution speaks of the said land as a

government land; obviously a mistake, but that does not

invalidate the decision taken. As is evident from

Regulation 33 (9) of the DCPR , MHADA can jointly with

the land owners or Cooperative Housing Societies carry

out the development on free hold lands. The erroneous

description of the said land i.e., as a government land,

we find to be inconsequential.

15. MHADA cannot also be said to have no jurisdiction

to implement a Cluster Development Scheme, in a free

hold land, since it is made possible as per the DCPR, if it

is carried out jointly with the land owners/ Cooperative

Housing Societies. In the present case, at the risk of

repetition, we have to emphasise that those Cooperative

Housing Societies who are parties herein, in one voice

support the intervention and initiative taken by MHADA.

16. Now, the question arises as to whether the

appellants had valid contracts, infringement of which

Page 13 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 will not be possible through an intervention made by

MHADA to carry out development of the subject land. As

admitted by the appellants the project for development

of land was first suggested by the appellants in the year

2010. The admission made by the appellants is seen from

Annexure R-5, produced in the counter affidavit filed by

Respondent Nos.5 to 20 and 23; that the redevelopment

process of the entire 25 buildings of the colony has been

initiated by the appellants since the year 2012. Annexure

R-5 is an objection addressed to M/s. Consultants

Combined Architects on the e-tender issued for

redevelopment of the Punjabi Colony in Guru Teg

Bahadur Nagar. The fact remains that despite a decade

and two years having passed, there is no construction

activity started in the subject land.

17. The appellants have asserted that they have spent

about Rs. 17 Crores which is not a matter to be merely

asserted on affidavit and requires substantiation by

proper evidence adduced in a civil suit. Here, it is also

pertinent that the Division Bench of the Bombay High

Page 14 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 Court found that even if the expenditure of Rs.9.5 Crores,

disbursed as corpus fund is accepted, looking at the

amount entitled to each of the occupants, only 217

persons would have been paid the said amount out of a

total of 1200 persons.

18. In this context, we refer to Annexure P3, which is

stated to be the resolutions of various societies,

appointing the appellant as the developer. The appellant

was preferred from among three bidders for reason of

the higher area offered per flat, the rent of Rs.15,000/-

per month offered for alternate residential arrangement

and Rs.3,50,000/- per member, offered as corpus fund.

The appellant does not have a case that either the corpus

fund was paid to all the occupants or the rent disbursed

on monthly basis for an alternative residential

accommodation. In so far as the floor area is concerned,

as we noticed, there is no construction on the land as of

now. It is in this context, the MLA of the constituency in

which the colony is located, and the majority of the

residents of the 25 buildings, who were evicted by

Page 15 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 demolition of the buildings in 2019, approached the

government for an alternative arrangement, so that they

can receive back, and shift into their own homes in, their

free hold land.

19. In so far as the appellants’ case is concerned, the

appellants rely on the agreements entered into with

various individual land owners and the permission

obtained from some Societies. That by formulation of

such Housing Societies, the majority decision would

prevail cannot be disputed. The agreements executed

with the land owners are said to be unregistered

agreements, unenforceable in the eyes of law. We

would however not make any declaration on that aspect

since our finding, as found by the High Court of Bombay,

is that the petitioners’ remedy is not under Article 226.

The appellants may have a remedy of specific

performance which the appellants have not at all

pursued as of now. In the guise of challenging the e-

tender, the appellants have been attempting to enforce

contractual rights as against the individual occupants

Page 16 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 and also against the Societies. We make this observation

without deciding on the validity or invalidity of such

agreements; which the respondents asserted to be

unenforceable. We have already found that the

expenses asserted by the appellant in pursuing the

agreements have not been substantiated in the writ

proceedings, nor have they established that it is by their

intervention the conveyances were facilitated. The

appellant may have a remedy against the individuals or

the Societies but the writ petition cannot be maintained

as against the e-tender issued by the MHADA, especially

when the Societies in one voice support the development

initiative of MHADA; which is a joint venture as permitted

by the DCPR.

20. The appellants have no locus standi to challenge

the e-tender in a writ proceeding, when the

redevelopment of the said land is carried out as a Cluster

Development Scheme under the DCPR, which enables

MHADA, jointly with the land owners/Cooperative

Societies to carry out such development. The appellants

Page 17 of 18 Civil Appeal @ SLP (C) No.29118 of 2024 have failed to show us any vested right to carry out the

development, especially when there is not even a

registered agreement with any individual or the

Societies. The very claim of the appellants based on the

resolutions purportedly of the Societies clearly indicate

that the promises made by the appellant were not

complied with and the redevelopment also was not

carried out within the time stipulated, leading to breach

of any such agreement; if at all such agreements were

valid and enforceable.

21. We find absolutely no reason to entertain the

appeal, and dismiss it.

22. Pending applications, if any, shall also stand

disposed of.

.……….……………………. J.

(SUDHANSHU DHULIA)

………….…………………. J.

(K. VINOD CHANDRAN) NEW DELHI;

APRIL 16, 2025.

Page 18 of 18 Civil Appeal @ SLP (C) No.29118 of 2024