A party is considered necessary if their rights or interests will be directly affected by the outcome of the litigation.

Headnote:
Slum Rehabilitation Scheme - Appointment of Developer - Termination of Agreement - Issuance of Letter of Intent - Necessary Party - Recall of Order - Maharashtra Slum Areas (Improvement, Clearance and Re-development) Act, 1971.
Fact of the Case:

Sigtia Construction Company Private Limited (Sigtia) was appointed as a developer by the Vile Parle Prem Nagar Co-operative Housing Society Limited (Society) for a slum rehabilitation scheme. Sigtia submitted a proposal to the Slum Rehabilitation Authority (SRA) and obtained the necessary approvals. However, the Society later terminated Sigtia's agreement and appointed Keya Developers and Construction Company (P) Ltd. (Keya) as the new developer. Sigtia challenged the termination of its agreement and the appointment of Keya in various legal proceedings, including a special leave petition before the Supreme Court.
Finding of the Court:

The Supreme Court held that Sigtia was a necessary party to the special leave petition filed by the Society and Keya, as it was directly affected by the order appointing Keya as the developer. The Court noted that Sigtia had obtained the necessary approvals from the SRA and had a valid agreement with the Society. The Court also held that the SRA was required to follow the procedure prescribed under the Maharashtra Slum Areas (Improvement, Clearance and Re-development) Act, 1971, and consider the applications of both Sigtia and Keya before issuing the Letter of Intent.
Issues: 1. Whether Sigtia was a necessary party to the special leave petition filed by the Society and Keya? 2. Whether the SRA was required to follow the procedure prescribed under the Maharashtra Slum Areas (Improvement, Clearance and Re-development) Act, 1971, before issuing the Letter of Intent?
Ratio Decidendi: 1. A party is considered necessary if their rights or interests will be directly affected by the outcome of the litigation. In this case, Sigtia's rights and interests were directly affected by the order appointing Keya as the developer, as it would have resulted in the termination of Sigtia's agreement with the Society. 2. The SRA is required to follow the procedure prescribed under the Maharashtra Slum Areas (Improvement, Clearance and Re-development) Act, 1971, before issuing the Letter of Intent. This procedure includes obtaining the necessary approvals from the competent authorities, verifying the eligibility of the slum dwellers and the developer, and ensuring that the proposed development scheme complies with the relevant regulations.
Final Decision: The Supreme Court allowed Sigtia's application to recall the order passed earlier and directed the SRA to consider the applications of both Sigtia and Keya in accordance with the procedure prescribed under the Maharashtra Slum Areas (Improvement, Clearance and Re-development) Act, 1971, and issue the Letter of Intent to the developer who satisfies the required qualifications and conditions.

JUDGMENT:

Dr. AR. Lakshmanan, J.

I.A. No.1 for impleadment is ordered on 10.07.2006.

M/s Sigtia Construction Company Private Limited was impleaded as respondent No.5 in Special Leave Petition No. 10281 of 2006.

I.A. No.3 of 2006 was filed by the applicant - M/s Sigtia Construction Company Private Limited to recall the order dated 27.06.2006 passed by this Court in Special Leave Petition No. 10281 of 2006. The order passed by this Court in Special Leave Petition No. 10281/2006 dated 27.06.2006 reads thus:

"O R D E R

Heard Mr.L.N.Rao, senior advocate for the petitioners. Mr. Sanjay V. Khande, Mr.B.S.Rao and Ms. Indra Sawhney, advocates accepts notice on behalf of respondent Nos.1 to 3. We also heard their submissions.

By a prayer for interim relief, the petitioners seek direction directing the Slum Rehabilitation Authority to issue a letter of intent in favour of M/s Keya Developers and Construction Company (P) Ltd. For undertaking re-development work in the slum situated at Irla Tank, S.V. Road, Vile Parle (West) Mumbai.

The grievance of the petitioners is that despite no legal impediment, the Slum Rehabilitation Authority was not issuing the letter of intent in favour of M/s Keya Developers and Construction Company (P) Ltd. despite a request made by the Society. According to them, it was merely a case of replacement of previous developers M/s Sigtia Construction Company Pvt. Ltd. who had not even started the project even after almost eight years and whose agreement with the Society had come to an end by efflux of time.

Mr. Sunil K.Varma, advocate, appears for the Chief Executive Officer, Slum Rehabilitation Authority, Bandra (E), Mumbai (respondent No.1). The learned counsel submits that the Slum Rehabilitation Authority will issue proper orders within two weeks from today. In view of the submission made by the learned counsel for respondent No.1, we direct the Slum Rehabilitation Authority to issue the letter of intent in favour of M/s Keya Developers and Construction Company (P) Ltd. which is also represented by Mr. Jaideep Gupta, learned senior counsel and the Society is represented by Mr. P.K. Ghosh, learned senior counsel.

The Special Leave Petition is disposed of accordingly.

"The reasons for recalling the order as stated in I.A.No.3 of 2006 are as under:-

The applicant Sigtia Construction Company Private Limited (in short "Sigtia") was appointed as developer by the Vile Parle Prem Nagar Co-operative Housing Society Limited (hereinafter called "Society" the respondent No.2). The applicant who is directly affected by an order appointing M/s Keya Developers and Construction Private Limited (in short "Keya") as Developer was not made a party respondent in Writ Petition No. 1277 of 2006 and also in the Special Leave Petition No. 10281 of 2006 although the applicant was a party in the previous proceedings, namely, Writ Petition No. 988 of 2004 which was filed before the High Court and the Special Leave Petition No. 11318 of 2005 and 19848 of 2005. According to the applicant, the respondents in the Special Leave Petition No. 10281 are not contesting respondents and particularly respondent No.1 - the Slum Rehabilitation Authority (in short "SRA") had taken a stand before this Court in earlier round in Special Leave Petition No. 19848 of 2005 by way of an affidavit that they will abide by any orders which may be passed by this Court. Nobody appeared for Bombay Municipal Corporation on 27.06.2006. Therefore, there was nobody present who could have opposed the passing of the order. The applicant, against whom allegations were made, was not made a party to the special leave petition. It was the duty of the petitioner in the special leave petition, to make the applicant Sigtia, who is directly affected, a party to the special leave petition. However, instead of doing that this Court was given the impression that all the affected parties were before this Court.

Mr. Arun Jaitley, learned senior counsel appearing for

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